Question

Bianca deposited $1500 into asavings account for whichsimple interest is calculatedquarterly. If her $1500 grew to$1509 after 3 months, what isthe yearly interest rate onBianca's account?

Answer 1

Given;

`P=1500,A=1509,t=3months=0.25year`
`\begin{gathered} A=P(1+(r)/(4))^(4t) \\ \\ 1509=1500(1+(r)/(4))^(4(0.25)) \\ \\ (1509)/(1500)=1+(r)/(4) \\ \\ 1.006-1=(r)/(4) \\ \\ r=4(0.006) \\ \\ r=0.024 \end{gathered}`

Thus, the yearly interest rate on Bianca's account is 2.4%