Question

Sonnie deposited $2,500 into an account that earns simple interest. After 5 years, she earned $375 in interest. What was the interest rate of the account?

Answer 1

3%

Explanation:

The interest on the account is given by the simple interest formula:

I = Prt

where I is the interest, P is the principal invested, r is the annual rate, and t is the number of years

375 = 2500r(5) . . . . . . using the given values in the formula

375/12500 = r = 0.03 . . . . . divide by the coefficient of r

Sonnie's account had a 3% interest rate.