Question

Loretta invested $1000 in a simple interest account yielding 5% paid annually. In 2 years, she will have $1100 in her account. From this example, we can conclude that 5% represents the:

Answer 1

The 5% represents the annual interest rate on Loretta's investment in a simple interest account.

Step-by-step explanation:

The 5% represents the annual interest rate on Loretta's investment. In simple interest, the interest is calculated as a percentage of the initial investment. So, if Loretta invested $1000, and after 2 years her account has grown to $1100, the interest earned would be $100 (1100 - 1000).

To find the interest rate, we can use the formula:

Interest = Principal * Rate * Time

Using the given information, we can plug in the values and solve for the rate:

100 = 1000 * Rate * 2

Simplifying the equation, we get:

Rate = 100 / (1000 * 2) = 0.05 or 5%

Therefore, the 5% represents the annual interest rate in this scenario.

Answer 2

Answer: periodic interest rate

Step-by-step explanation: took the quiz