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You deposit $1400 into a savings account that earns simple annual interest. After 12 years, the balance in the account is $2408. What is the annual interest rate?
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You deposit $1400 into a savings account that earns simple annual interest. After 12 years, the balance in the account is $2408. What is the annual interest rate?

User Kvb
by
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1 Answer

6 votes
The formula is
A=p (1+rt)
A future value 2408
P present value 1400
R interest rate?
T time 12 years
Solve the formula for r
R= ((A/p)-1)÷t
R=((2,408÷1,400)−1)÷12
R=0.06×100
R=6%
User Lau
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8.0k points
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