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devlian [24]
3 years ago
11

Li deposited $17,500 into a bank account that earned simple interest each year. After 2 years, he had earned $2975 in interest.

Mathematics
1 answer:
Licemer1 [7]3 years ago
4 0
R = 8.5%/year

Equation:
r = (1/t)(A/P - 1)
Calculation:
Solving our equation
r = (1/2)((20475/17500) - 1) = 0.085
r = 0.085
converting r decimal to a percentage
R = 0.085 * 100 = 8.5%/year

The interest rate required to get
a total amount, principal plus interest, of $ 20,475.00
from simple interest on a principal of $ 17,500.00
over 2 years is 8.5% per year.
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