Question

Erin had $6,191.50 in a savings account with simple interest. She had opened the account with $6,100 just six months earlier. What was the interest rate?

Answer 1

Answer: the interest rate is 3%

Explanation:

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest paid on the amount invested.

P represents the principal or amount invested.

R represents interest rate

T represents the duration of the investment in years.

From the information given,

P = $6100

Interest = total amount earned - principal. Therefore,

I = 6191.50 - 6100 = $91.5

T = 6 months = 6/12 = 0.5 year

Therefore,

91.5 = (6100 × R × 0.5)/100

91.5 = 30.5R

R = 91.5/30.5

R = 3%

Answer 2

3%

Explanation:

Erin earned 6191.50 -6100 = 91.50 in interest in 6 months on a 6100 principal. Then the annual interest rate is ...

I = Prt

r = I/(Pt) = 91.50/(6100·6/12) = .03 = 3%

The interest rate was 3%.