Question

Tammy deposited $520 in the bank account that earns simple interest every year after 5 years she had earned $156 and interest if no money was deposited into or withdrawn from the account what was the annual interest rate

Answer 1

Answer:

6%.

Step-by-step explanation:

We have been given that Tammy deposited $520 in the bank account that earns simple interest every year after 5 years she had earned $156.

To find the interest rate we will use simple interest formula.

$I=P*r*T$

I= Interest.

P= Principal amount.

r=Annual interest rate (in decimal form).

T= Time in years.

We have been given that I=156, T=5, P=520

Upon substituting our values in above formula we will get,

$156=520*r*5$

$156=2600r$

$r=\frac{156}{2600}$

$r=0.06$

Let us multiply 0.06 by 100 to convert annual interest rate in percentage.

$0.06*100=6 \text{ percent}$

Therefore, the annual interest rate was 6%.