Question

Sue invests £9000 in an account for one year.

At the end of the year, interest is added to the account.

Sue pays tax on this interest at a rate of 20%.
She pays £30.24 tax.

Work out the percentage interest rate for the account.

Answer 1

The interest rate = 1.68%

Explanation:

Sue invests £9000 in an account for one year.

She pays £30.24 at a rate of 20%

So 20% of the interest =£ 30.24

Let the interest be x

X0.2= 30.24

X=£ 151.2

The total interest was£ 151.2

The rate R at which generated this interest

R = (100*151.2)/(1*9000)

R= 15120/9000

R= 1.68%

The interest rate = 1.68%