Question

Wendy had $633 in a savings account with simple interest. She had opened the account with $600 just 6 months earlier. What was the interest rate?

Answer 1

Answer: The interest rate was 11% per year.

Explanation:

STEP 1: Convert 6 months into years.

STEP 2: Find the interest rate by using the formula , where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.

In this example I = $33, P = $600 and t = 0.5 years, so

I = P × i × t

`i = (I)/(P t)`

`i=(33)/((600)(0.5))`

i = 0.10.11 or 11% per year