Question

You save $1400 from a summer job. You decide to put it into an account that earns simple annual interest. After 9 months, your balance is $1421. Find the annual interest rate.

Answer 1

2%

Explanation:

Calculate annual interest amount first:

annual interest x 9/12=21

Annual interest =21x12/9

annual interest amount=$28

calculate annual interest rate

1400 x interest rate = annual interest

$1400 x interest rate = $28

interest rate =$28/1400

interest rate=.02 or 2%