Question

What was the annual interest rate on a CD that matured after one year, earned

$1.50 in simple interest calculated annually, and had an initial value of $60?
A. 25%
B. 2.5%
C. 1.025%
D. 10.25%

Answer 1

2.5%

Explanation:

In order to find the interest rate of a thing, you divide the first value by the second. This gives you 0.025, which is roughly 2.5%. 10% and 25% wouldn't make sense, as those are 6 and 15 dollars, so they aren't applicable.