Question

50 Benson purchased a $1,800 certificate of deposit that earns s

of 1 year, the certificate was worth $1,857.60.

What is the annual interest rate on this certificate of deposit

Answer 1

3.2%

Explanation:

The computation of the annual rate of interest is shown below:

As we know that

Simple interest = Principal × rate of interest × time period

($1,857.60 - $1,800) = $1,800 × rate of interest × 1

$57.60 = $1,800 × rate of interest × 1

So, the rate of interest is

= $57.60 ÷ $1,800 × 100

= 3.2%

Hence, the rate of interest on annual basis is 3.2%