Question

You invested $1500 in a bank account for five years I received $150 in interest. What was the annual simple interest rate for the account?

Answer 1

If you have 1500 in a bank account for 5 years earning 150 in interest, you first need to figure out your yearly earnings. 150 divided by 5 is 30. That is what you're earning in interest per year. So now you figure out what each percent of interest would earn. 1500 divided by 100 is 15. 15 is equal to 1%. So now that you know what each percentage of interest would earn, you can take your yearly interest and divide by your percent. 30 divided by 15 is 2. 2 percent is your annual interest rate.

150/5(years)=30 1500/100=15(per percent) 30/15=2

2 percent is your annual interest rate