Question

Diana invested $3000 in a savings account for 3 years. She earned $450 in interest over that time period. What interest rate did she earn? Use the formula I=Prt to find your answer, where I is interest, P is principal, r is rate and t is time. Enter your solution in decimal form rounded to the nearest hundredth. For example, if your solution is 12%, you would enter 0.12.

Answer 1

If I=P*r*t, we can input 450 in for I, 3000 in for the principal (P, or the starting rate), and 3 for t=time because there were three years, resulting in 450=9000*r. Next, we can divide both sides by 9000 to get 0.05 or 5% as our answer.