Question

Giselle deposited $3500 into a savings account for which simple interest is calculated monthly. If her $3500 grew to $3514 after 1 month, what is the yearly interest rate on Giselle's account? A. 0.48% B. 4% C. 0.4% D. 4.8%

Answer 1

Answer:

D. 4.8 %.

Step-by-step explanation:

Since, the amount after getting simple interest on an amount is,

$A=P+\frac{P\times r\times t}{100}$

Where, P is the principal amount,

r is the rate of interest per period,

t is the number of periods,

Here, P = $ 3500,

t = 1 month,

A = $ 3514,

Let R be the annual rate of percentage,

Thus, the rate per month = R/12 %,

By substituting the value in the above formula,

$3514 = 3500 + \frac{3500\times \frac{R}{12}\times 1}{100}$

$14 = \frac{3500R}{1200}$

$16800 = 3500R$

$\implies R = 4.8\%$

Hence, the annual rate of interest on account is 4.8 %.

Answer 2

A=p(1+rt)
3514=3500(1+(1/12)r)
Solve for r
r=0.048*100=4.8%