Question

Dan deposited $700 in a savings account. At the end of 3 year, he had earned $115.50 in simple interest. What interest rate did he receive? Question 1 options:

Answer 1

5.5%

Explanation:

The formula for Simple Interest = PRT

Where

Simple Interest = $115.50

P = Principal = $700

R = Interest rate = ??

T = Time in years = 3 years

$115.50 = $700 × R × 3

R = $115.50/$700 × 3

R = $115.50/$2100

R = 0.055

R = Interest rate = 0.055

We Multiply by 100

= 0.055 × 100

= 5.5%