Question

A savings account starts with $250. It earns $30 in 2 years. Find the
rate of interest

Answer 1

The annual interest rate is 6%

Explanation:

Use the formula for simple interest: i = prt.

Set i = prt equal to $30: $30 = prt

Solve this for r:

$30

r = -------------- = ($30) / ($500) = 0.06

$250(2)

The annual interest rate is 6%