Question

Your savings account earns simple interest. You put in $400 2 years ago and have earned $40 in interest. What is the interest rate?

Answer 1

Answer: 5% by year

Explanation:

You earned 40 bucks in 2 years so divide that by 2 and you get 20 bucks.

You put in 400 dollars and earned 20 bucks per year which is 5% of 400.