Question

You deposit $600 in a savings account. After 18
months, you check your statement and see that
you have earned $31.50 in interest. What is the
interest rate for your account?

Answers

  1. Answer:
    To calculate the interest rate for your account, you will need to use the formula for simple interest:
    Interest = Principal x Rate x Time
    In this case, the principal is the amount of money you deposited, or $600. The time is the number of months the money was in the account, or 18 months. And the interest is the amount of money you earned, or $31.50.
    Plugging these values into the formula, we get:
    $31.50 = $600 x Rate x 18
    To solve for the rate, we can divide both sides of the equation by $600 and 18:
    Rate = $31.50 / ($600 x 18)
    Simplifying this expression gives us:
    Rate = 0.01625
    So, the interest rate for your account is approximately 1.625%.

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