204k views
1 vote
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
by
7.9k points

1 Answer

2 votes

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
by
7.3k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories