Question

Jacob invested $300 in a savings account and earned $81 in simple interest at the end of 9 years. what was the interest rate

A) 3%
B) 3.5%
C) 4%
D) 4.5%

Answer 1

A.

Explanation:

We use the simple interest equation of A=P(1+rt).

A-the total amount with interest earned

P-the initial amount or principal

r-rate

t-time in years

We substitute the values P=300, A=381, and t=9. We then solve for r.

`381=300(1+9r)`

We divide both sides by 300.

`(381)/(300)=(300(1+9r))/(300)`

Simplify.

`1.27=1+9r`

We subtract 1 from both sides.

`1.27-1=1-1+9r`

Simplify.

`0.27=9r`

We divide by 9.

`(0.27)/(9)=(9r)/(9)`

r=0.03

We need to convert the decimal to a percentage by multiplying by 100.

The interest rate is 3%.