Question

Reese deposited $7500 for two years into a money market account. At the end of two years, she earned $1200 interest. What rate of interest did she receive? a. 796 b. 7.5% C. 8%

Answer 1

The interest formula is

`I=\frac{\text{PRT}}{100}`

Thus

`\begin{gathered} R=(100I)/(PT) \\ =(100*1200)/(7500*2) \\ =8 \end{gathered}`

Thus the interest rate was 8% per annum