Question

A principal of $3000 was invested in a savings account for 3 years. If the interest earned for the period was $450, what was the interest rate?

Answer 1

The interest rate for a principal of $3000 invested over 3 years that earned $450 in interest is calculated using the simple interest formula. By rearranging the formula, the interest rate is found to be 5%.

Step-by-step explanation:

The question asks us to calculate the interest rate for a principal of $3000 that was invested in a savings account for 3 years, which generated $450 in interest. To find the interest rate, we can use the simple interest formula:

I = PRT

Where:

• I is the interest earned,
• P is the principal amount,
• R is the interest rate, and
• T is the time in years.

Rearranging the formula to solve for R (interest rate), we get:

R = I / (PT)

Now, let's plug in the values we know from the question:

R = $450 / ($3000 × 3)

R = $450 / $9000

R = 0.05 or 5%

So, the interest rate was 5%.