Question

Ron deposited $450 into a savings account for which simple interest is

calculated semiannually. If his $450 grew to $459 after 6 months, what is the
yearly interest rate on Ron's account?
A. 1%
B. 2%
C.4%
D. 8%

Answer 1

Explanation:

Simple Interest = Principal × Time × Rate /100

Semiannually means happening twice in a year.

Interest rate = SI×100/Principal×Time

Interest rate=$459-$450=$9 for 6 months, $9×2=$18 for a year.

Rate=$18×100/450×1

=4%