Question

Nigel currently has a balance of $668.47 in an account he has held for 15 years. he opened the account with an initial deposit of $497. what is the simple interest rate on the account?

Answer 1

You are given Nigel's current balance of $668.47 in an account he has held for 15 years. Also you are given an initial deposit of $497. You are asked to find the simple interest rate on the account. You will use the simple interest formula, F = P(1 + rn) were F is the current balance, P is the principal amount deposited, r is the rate and n is the number of years.

F = P(1 + rn)
668.47 = 497(1 + r(15))
r = 0.023 or 2.3%