Question

Pierre earned $78.75 interest on his

savings bonds in one year. If he had $750.00 in
bonds, what was the rate of interest paid?

Answer 1

10.5%

Explanation:

Use the interest formula to fill in the given values and solve for the rate:

I = Prt

where I is the interest earned on principal P at annual rate r for t years.

78.75 = 750·r·1

r =78.75/750 = 0.105 = 10.5%

The rate of interest paid was 10.5%.