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A bank account has a beginning of 560.00. After 6 months, the balance in the account has increased to 572.60. What interest rate is being earned annually on this account?

User Ruchelle
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1 Answer

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This is tricky because we are given the interest rate for the year but the problem is figureing the interest for 6 months or 1/2 year. We will have to double the difference before solving for the yearly interest.

572.60 - 560.00 = 12.60 interest added for 6 months x 2 = 25.20 for 12 months

(This problem assumes the interest will stay the same the next 6 months)

We need to find what percent 25.20 is to our original balance.

25.20/560 = x / 100

2520 = 560x

x = 4.5 percent interest

Check .045 x 560.00 = 25.20 interest in one year (or 12.60 in 6 months)

User Asnad Atta
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