Question

Celine made $1,440 in interest by placing $3,000 in a savings account with simple interest for 4 years. What was the interest rate?

Answer 1

We can use the formula for simple interest:

I = P*r*t

Where I is the interest earned, P is the principal (the initial amount deposited), r is the interest rate (as a decimal), and t is the time period in years.

Plugging in the given values:

$1,440 = $3,000 * r * 4

Simplifying:

r = $1,440 / ($3,000 * 4)

r = 0.12

Multiplying by 100 to convert to a percentage:

r = 12%

Therefore, the interest rate on this savings account was 12%.