Question

Emma puts $10,000 in a simple interest account at a bank. She will earn $1,800 in 4 years. What is the annual interest rate for the account?.

Answer 1

Answer:

4.5%

Explanation:

A = P(1 + rt)

A = final amount

P = initial principal balance

r = annual interest rate

t = time (in years)

A = 10000 + 1800 = 11800

11800 = 10000 (1 + r4)

1.18 = 1 + 4r

4r = 0.18

r = 0.18/4 = 0.045 = 4.5%

Answer 2

Answer: 4.5%

Explanation:

A = P(1 + rt)

A = final amount

P = initial principal balance

r = annual interest rate

t = time (in years)

A = 10000 + 1800 = 11800

11800 = 10000 (1 + r4)

1.18 = 1 + 4r

4r = 0.18

r = 0.18/4 = 0.045 = 4.5%