Question

Using a savings amount of $450, assume you deposited the total amount

saved in a savings account for one year and earned $32.75 in interest. What
was your rate of return?

Answer 1

7.3%

Explanation:

Using the formula for calculating the simple interest to get the rate of return;

Simple Interest = Principal * Rate * Time/100

Given Principal = $450,

Time (in years) = 1 year

Simple interest = $32.75

Rate (in %) =?

Substituting the given values in the given formula to get the rate;

32.75 = 450*1*R/100

450R = 3275

R = 3,275/450

R = 7.3%

The rate of return is 7.3%