Question

You deposit $27,580.00 in an interest-bearing account. After one year, your accrued interest is $1,442.43.

What is the interest rate of this account?

Principal:
$
27
,
580.00
time:
1
year

Interest:
$
1
,
442.43
r

=

I
P
t


Round your answer to the nearest hundredth of a percent, if necessary.

Answer 1

`r=5.23\%`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=1\ years\\ P=\$27,580\\I=\$1,442.43\\r=?`

substitute in the formula above

`1,442.43=27,580(r*1)`

Solve for r

`r=1,442.43/27,580`

`r=0.0523`

convert to percent

`r=0.0523*100=5.23\%`