Question

benson purchased a 1,800 certificate of deposit that earns simple annual interest. At the end of 1 year the certificate was worth 1,857.60 what is the annual interest rate on this certificate of deposit

Answer 1

3.2%

Explanation:

-Let r be the simple interest rate per annum.

-Given the total amount after 1 year is 1857.60, the initial amount is 1800

#We use the simple interest formula to find the rate of interest:

`Interest=Final\ Amount-Initial\ Amount\\\\=1857.60-1800\\\\=57.60\\\\I=Prt\\\\57.60=1800* r* 1\\\\r=(57.60)/(1800)\\\\=0.032\\\\=3.2\%`

Hence, the annual interest rate on the deposit is 3.2%