Question

Nadia deposited $3000 into an account that earns annual simple interest. 13 points

After 6 years, she had earned $990 in interest. What was the interest rate
of the account? *
Your answer

Answer 1

To find the annual interest rate of Nadia’s account, we use the simple interest formula I = PRT. By rearranging the formula and plugging in the known values, we determine that the interest rate is 5.5%.

Step-by-step explanation:

To determine the interest rate of Nadia’s account, we can use the formula for simple interest I = PRT, where I is the interest earned, P is the principal amount deposited, R is the annual interest rate in decimal, and T is the time in years. In Nadia's case, we know that she earned $990 in interest (I), deposited $3000 (P), over 6 years (T).

We need to solve for R.

The formula thus becomes: $990 = $3000 × R × 6

To find R, we divide both sides of the equation by $3000 × 6:

R = $990 / ($3000 × 6)

R = $990 / $18000

R = 0.055 or 5.5%

Therefore, the annual interest rate Nadia received on her account was 5.5%.

Answer 2

Interest rate of the account is 5.5%, if Nadia deposited $3000 into an account that earns annual simple interest after 6 years, she had earned $990 in interest.

Step-by-step explanation:

The given is,

Nadia deposited $3000

After 6 years, she had earned $990 in interest

Simple interest

Step:1

Formula to calculate the future amount with simple interest is,

`F = P(1+(r)(t))`...........................(1)

Where, F - Future amount

P - Initial investment

r - Rate of interest ( simple interest )

t - No. of years

Step:2

From the given,

I = $990

P = $3000

F = Initial investment + Interest amount

F = P + I = 3000 + 990 = $3990

t = 6 years

Equation (1) becomes,

3990 = 3000 ( 1 + (r)(6) )

`(3990)/(3000) = (1+(r)(6))`

1.33 = 1 + (r)(6)

1.33 - 1 = (r)(6)

0.33 = (r)(6)

`r = (0.33)/(6)`

r = 0.055 × 100

r = 5.5%

Result:

Interest rate of the account is 5.5%, if Nadia deposited $3000 into an account that earns annual simple interest after 6 years, she had earned $990 in interest.