Final answer:
To find the annual interest rate for a deposit of $3200 that earns $416.00 over 60 months, the simple interest formula I = PRT is used, resulting in an annual interest rate of 2.6%.
Step-by-step explanation:
The question at hand involves finding the annual interest rate for a simple interest scenario. The formula for simple interest is I = PRT, where I stands for interest, P is the principal, R is the rate, and T is the time in years. Given that a $3200 deposit earns $416.00 in interest over 60 months (which is 5 years), we can rearrange the formula to solve for R (the interest rate).
Using the interest formula, we have:
I = PRT
$416.00 = $3200 × R × 5
Now, solve for R:
R = $416.00 / ($3200 × 5)
R = $416.00 / $16000
R = 0.026 or 2.6%
The annual interest rate to the nearest tenth of a percent is 2.6%.