Question

Li deposited $17,500 into a bank account that earned simple interest each year. After 2 years, he had earned $2975 in interest.

If no money was deposited into or withdrawn from the account, what was the annual interest rate?

Answer 1

let x is the interest rate

$17,500 * 2 * x = $2975
$35,000x = $2,975
x = $2,975/$35,000
x = 0.085

0.085 * 100 = 8.5%

Answer: annual interest rate was 8.5%

Answer 2

Answer : The annual interest rate was, 8.5 %

Step-by-step explanation :

Given:

Principle = $17,500

Simple interest (S.I) = $2975

Time = 2 years

Now we have to determine the interest rate.

Formula used :

$S.I=\frac{PRT}{100}$

where,

P = principle  

R = interest rate

T = time

S.I = simple interest

Now put all the given values in the above formula, we get:

$\ 2975=\frac{(\ 17,500)\times R\times (2)}{100}$

$R=\frac{\ 2975\times 100}{(\ 17,500)\times (2)}$

$R=8.5\%$

Thus, the annual interest rate was, 8.5 %