Question

After 3 months 5004 deposited in a savings account with simple interest had earned 162.63 in interest. What was the interest rate

Answer 1

13%

Explanation:

Please use the $ sign.

The simple interest formula is i = p*r*t, where p is the principal amount, r is the interest rate as a decimal fraction, and t is the time in years. Here, t = 1/4 year; r is unknown, p is $5004 and i is $162.63.

Writing this out with the given info, we get:

$162.63 = $5004*r*(1/4).

We can solve this for r by multiplying both sides by 4/$5004:

(4/$5004)($162.63) = (4/$5004)($5004)*r*(1/4) = r

Evaluating r, we get (4)($162.63)/$5004 = 0.13

The interest rate, r, is 0.13, or 13%.