Question

Lily deposited $500 in a savings account. At the end of 1 year, she had earned $20 in simple interest. What interest rate did she receive?

Answer 1

Hi! To find the amount of simple interest earned, we can divide the amount earned in interest by the amount in the savings account. 20/500 is 0.04. To get this in percent form, multiply by 100 to get 4. Lily's savings account received an interest rate of 4%.