Question

Aaron made $14 in interest by placing $100 in a savings account with simple interest for 1 year. What was the interest rate?

Answer 1

We need I = prt, where p = principle, I = interest, r = interest rate and t = time (in years).

I = prt

14 = 100r(1)

We now solve for r.

14 = 100r

Divide both sides by 100 to isolate r.

14/100 = 100r/100

0.14 = r

Now change 0.14 to a percent multiplying by 100.

100(0.14) = r

14 = r

The interest rate is 14%.