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Bob earned $8 of interest on a $300 deposit left in the bank for 3 months. What was the interest rate? Round to the nearest 100th.

User Phteven
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Final answer:

The annual interest rate is found using the simple interest formula, resulting in an interest rate of 10.67% when rounded to the nearest hundredth.

Step-by-step explanation:

The interest rate can be calculated using the formula for simple interest: I = PRT, where I is the interest earned, P is the principal amount deposited, R is the annual interest rate, and T is the time in years. In this scenario, Bob earned $8 interest on a $300 deposit over 3 months (which is 0.25 of a year).

First, we'll substitute the known values into the formula:


$8 = $300 × R × 0.25

Next, we solve for R:


R = $8 / ($300 × 0.25)


R = $8 / $75


R = 0.1067

When converted to a percentage and rounded to the nearest hundredth, the annual interest rate is 10.67%.

User Igor Dvorzhak
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