Question

Nadia deposited $3000 into an account that earns annual simple interest. 13 points
After 6 years, she had earned $990 in interest. What was the interest rate
of the account? *
Your answer

Answer 1

Interest rate of the account is 5.5%, if Nadia deposited $3000 into an account that earns annual simple interest after 6 years, she had earned $990 in interest.

Step-by-step explanation:

The given is,

             Nadia deposited $3000

             After 6 years, she had earned $990 in interest

             Simple interest

Step:1

            Formula to calculate the future amount with simple interest is,

                             $F = P(1+(r)(t))$...........................(1)

          Where, F - Future amount

                       P - Initial investment

                        r - Rate of interest ( simple interest )

                        t - No. of years

Step:2

           From the given,

                       I = $990

                      P = $3000

                      F = Initial investment + Interest amount

                      F = P + I = 3000 + 990 = $3990

                       t = 6 years

          Equation (1) becomes,

                 3990 = 3000 ( 1 + (r)(6) )

                    $\frac{3990}{3000} = (1+(r)(6))$

                    1.33 = 1 + (r)(6)

                1.33 - 1 = (r)(6)

                    0.33 = (r)(6)

                         $r = \frac{0.33}{6}$

                          r = 0.055 × 100

                         r = 5.5%

Result:

        Interest rate of the account is 5.5%, if Nadia deposited $3000 into an account that earns annual simple interest after 6 years, she had earned $990 in interest.