Question

Nancy had $2,848.52 in a savings account with simple interest. She had opened the account with $2,006 exactly 3 years earlier. What was the interest rate?

Answer 1

14%

Explanation:

A = P(1 +rt) . . . . . . . . . . . . . . . . . . formula for the balance for simple interest

2848.52 = 2006(1 +3r) . . . . . . . filling in the given numbers

1.42 = 1 +3r . . . . . . . . . . . . . . . . . .divide by 2006

0.42 = 3r . . . . . . . . . . subtract 1

0.14 = r = 14%

Nancy's account paid interest at 14% per year.