Question

Andrew's bank account started off with a deposit of $750, and after 4 years he earned $165 in interest. The interest is simple interest, calculated on the basis of the initial deposit. What is the interest rate that Andrew's bank provides? Give your answer as a percentage to the nearest tenth of a percent. Do not include the percent symbol in your answer

Answer 1

`r=5.5\%`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=4\ years\\P=\$750\\I=\$165\\r=?`

substitute in the formula above

`165=750(4r)`

Solve for r

`r=165/[750(4)]`

`r=0.055`

Convert to percentage

`r=5.5\%`