Question

Joannie lent $200 to her sister. Four years later, her sister repaid her in full with $228. What simple annual interest rate did Joannie's sister pay? A. 3.0% B. 3.5% C. 4.0% D. 4.5%

Answer 1

Ok, so lets convert all the percents into decimals to help us solve this problem

A 3.0%= 0.03

B 3.5%= 0.035

C 4.0%= 0.04

D 4.5%= 0.045

Now, we can multiply $200 by all the decimals we just converted to see which one will add up to $208

200*0.03= 6-------200+6=206 (this is not equal to 208 so it's not A)

200*0.035=7--------200+7= 207 (Still does not equal 208, so it's not B)

200*0.04= 8---------200+8=208 C is your answer