Question

after two years $900 deposited in a savings account with simple interest had earned $18 in interest. what was the interest rate

Answer 1

The expression for Simple Interest is :

`\text{Simple Interest = }\frac{\text{ Principal AMount}* Time\text{ }* Rate\text{ of Interest}}{100}`

Given that Principal amount = $900

Time period = 2 years

Simple Interest = $18

Substitute the value and solve for RAte of interest

`\begin{gathered} \text{Simple Interest = }\frac{\text{ Principal AMount}* Time\text{ }* Rate\text{ of Interest}}{100} \\ 18=(900*2* R)/(100) \\ R=(18*100)/(900*2) \\ R=1 \\ \text{ Rate of interest = 1 percent} \end{gathered}`

Answer : Interest Rate = 1%