Question

An investor deposited $7,590 in a savings account 10 years ago that earns simple annual interest. today, the account balance is $11,916.30. what is the simple interest rate?

Answer 1

Suppose an investor invested $7,590 in a savings account with basic yearly interest 10 years ago. The account currently has a balance of $11,916.30. 5.7% is the basic interest rate.

Why do we call something "interesting"?

You must pay interest on money you borrow, and you must add interest to money you lend. The most typical approach to display interest is as a percentage of the annualized principal amount of a loan. This ratio represents the interest rate on the loan.

What is meant by an interest example?

By examining the rate, a person can figure out exactly how much interest they will accrue or pay on a loan. For example, if a $100 loan had a nominal interest rate, there would be a $6 interest fee.of 6% ($100 X 0.06). Despite an increase in loan size, the rate doesn't change. Even if the loan amount were increased to$1,000, the borrower would still be expected to pay 6% of the total.

Explanation:

Answer 2

To find the simple interest rate, you can use the following formula:

Simple interest rate = (ending balance - starting balance) / (starting balance * number of years)

In this case, the starting balance is $7,590, the ending balance is $11,916.30, and the number of years is 10. Plugging in these values, we have:

Simple interest rate = ($11,916.30 - $7,590) / ($7,590 * 10)

= ($4,326.30) / ($7,590 * 10)

= $4,326.30 / $75,900

= 0.057 or 5.7%.

Therefore, the simple interest rate is 5.7%.