Question

A bank deposit paying simple interest grew from an initial sum of $1000.00 to $1075.00 in 9 months. Find the interest rate.

Answer 1

The initial amount is, p = $1000.0

The final amount is, $1075.0

So the interest received is,

`1075-1000=75`

The time period is 9 months. Converting it into years,

`(9)/(12)=\text{0}.75\text{ years}`

We know that, the interest is calculated as,

`I=\text{prt}`

Here, r is the rate of interset, t is the time period, p is the initial amount.

So the rate of interest can be calculted as,

`r=(I)/(pt)=(75)/(1000*0.75)=00.1`

The rate of interset is, 0.1%.