Final answer:
To find the simple interest rate earned on a deposit of $6450 after 4 years with $1806 in interest, we use the formula I = PRT and solve for R to get a rate of 7% per year.
Step-by-step explanation:
To calculate the simple interest rate that was earned on a savings account deposit, you can use the formula for simple interest: I = PRT, where I is the interest earned, P is the principal amount deposited, R is the interest rate, and T is the time the money is invested in years.
In this case:
- I (Interest earned) = $1806
- P (Principal) = $6450
- T (Time) = 4 years
We need to solve for R (rate), so we rearrange the formula to R = I / (PT).
By substituting the known values, we get:
R = $1806 / ($6450 × 4)
R = $1806 / $25800
R = 0.07
To express the rate as a percentage, we multiply by 100, resulting in:
R = 0.07 × 100
= 7% interest rate per year.