Question

A deposit of $10,000 was made to an account the year you were born. After 12 years, the account is worth $16,000. What simple interest rate did the account earn?

Answer 1

`5\%`

Explanation:

You got $6000 more, so each year you gain $500. Now we calculate the percentage out of 10,000 to find the simple interest rate:

`(500)/(10,000) = 0.05 \implies 5\%`