Question

Sharon made $45 in interest by placing $500 in a savings account with simple interest for 1 year. What was the interest rate?

Answer 1

Answer: The interest rate was 9%.

Explanation:

If principal amount P is invested at the rate of r percent with simple interest(I) for t years, the formula to find rate :

`R=(I*100)/(P* t)`

As per given,

P = $ 500, I = $45, t = 1 year

Substitute values in formula , we get

`R=(45*100)/(500*1)\\\\\Rightarrow R=9\%`

Hence, The interest rate was 9%.