Question

99 POINTS................Tammi deposited $520 into a bank account that earned simple interest each year. After 5 years, she had earned $156 in interest.
If no money was deposited into or withdrawn from the account, what was the annual interest rate?

Round your answer to the nearest hundredth.

Answer 1

520 is the principal, 156 is the total interest in 5 years. Divide the 156 by 5, and you get $31.20 per year. divide: 31.2 / 520 = 0.06. convert that to a fraction, and you get the answer: 6%

Answer 2

After 5 years Tammi earned $156 you'll divide 156 by 5 and get $31.20. So, $31.2 is 6% of $520..So, the answer is 6%.