Question

You deposit $4000 in an account that earns simple interest. After 6 months, the account earns

$36 in interest. What is the annual interest rate.

Answer 1

1.8%

Explanation:

Interest(SI) = $36

Principal(P) = $4000

Time(T)= 6 months

=6/12 year

=0.5 years

Rate(R)=?

Now,

SI= PTR/100

36=4000*0.5*R/100

36*100=2000R

3600/2000=R

R=1.8

Therefore, the rate is 1.8%