Question

The question is “ you put $350 in an account. the account earns $17.50 simple interest in 2.5 years. what was the annual interest rate.” i dont know if im supposed to divide 17.50 by 2.5 because i got 7 and i was still wrong

Answer 1

Given:

Initial amount = $350

earn simple interest = $17.50

Time = 2.5 year

Find: Annual interest rate is:

Sol:.

$S\mathrm{}I=\frac{P\times R\times T}{100}$

Where,

$\begin{gathered} SI=\text{simple interest} \\ P=\text{Initial amount} \\ R=\text{Rate} \\ T=\text{Time} \end{gathered}$$\begin{gathered} 17.50=\frac{350\times R\times2.5}{100} \\ 17.50\times100=350\times R\times2.5 \\ R=\frac{17.50\times100}{350\times2.5} \\ R=\frac{1750}{875} \\ R=2 \end{gathered}$

So interest rate is 2%