Question

Reese deposited $7500 for two years into a money market account. At the end of two years, she earned $1200 interest. What rate of interest did she receive? a. 796 b. 7.5% C. 8%

Answer 1

The interest formula is

$I=\frac{\text{PRT}}{100}$

Thus

$\begin{gathered} R=\frac{100I}{PT} \\ =\frac{100\times1200}{7500\times2} \\ =8 \end{gathered}$

Thus the interest rate was 8% per annum