Question

Find the annual interest rate.

I = $54, P = $900, t = 18 months

Answer 1

For simple interest rate,
I=P(i)t
54=900(i)(18/12)
i=54/900*(12/18)=4% annually

Answer 2

We have been given that

`I = $54, P = $900, t = 18 \text{ months</p><p>}`

We know the formula,

`I=Prt`

On substituting the given values, we get

`54=900\cdot r\cdot (18)/(12)\\\\r=(54\cdot 12)/(900\cdot 18)\\\\r=(1)/(25)\\\\r=0.04\\\\r=4\%`

The annual rate interest is 4%