Question

Emilia made $2,800 in interest by placing $70,000 in a savings account with simple interest for 2 years. What was the interest rate?​

Answer 1

To calculate the interest rate at which Emilia placed her $70,000 in a savings account, we need to use the simple interest formula, which is:

I = P * r * t

where:

I = interest earned

P = principal amount

r = interest rate

t = time in years

We know that Emilia earned $2,800 in interest and placed $70,000 in the savings account for 2 years. Substituting these values into the formula, we get:

2,800 = 70,000 * r * 2

Simplifying the equation, we have:

r = 2,800 / (70,000 * 2)

r = 0.02 or 2%

Therefore, the interest rate at which Emilia placed her $70,000 in the savings account was 2%. This means that for every year that the money was in the account, Emilia earned 2% of the principal amount in interest.