Question

Tammi deposited $520.00 into a bank account that earned simple interest each year. After 5 years she had earned $156 in interest what was the annual interest rate

Answer 1

R=6%

Explanation:

Given:

Total money deposited = $ 520

Total years = 5

Total earned = $156

Simple interest

To Find:

interest rate=R=?

Solution:

We know the formula for calculating total amount earned by a simple interest rate and formula for it is

I = P(rT) ..................(i)

where I is total amount earned

P is total money invested

r is rate

and t is time

putting the values gives us

156 = 520 (r)(5)

156 = 2600 r

dividing both sides by 2600

r =
`(156)/(2600)`

r= 0.06

We have to find R

Now from simple rules of

we know that

R = r* 100 %

so putting the value of r

R = 0.06 * 100 %

R = 6%

which is the rate at which money was invested