Question

Candice had $9,420 in a savings account with simple interest. She had opened the account

with $9,000 just 4 months earlier. What was the interest rate?

Answer 1

Answer: 1.67%

We can start by using the formula for simple interest:

I = P * r * t

where I is the interest earned, P is the principal (initial amount), r is the interest rate, and t is the time (in years).

In this case, we know that the principal (P) is $9,000 and the interest earned (I) is $420. We also know that the time (t) is 4 months, but we need to convert that to years by dividing by 12, since there are 12 months in a year:

t = 4/12 = 1/3 year

Substituting these values into the formula, we get:

420 = 9000 * r * 1/3

Simplifying and solving for r, we get:

r = 420 / (9000 * 1/3) = 0.0167 or approximately 1.67%

Therefore, the interest rate for the savings account was 1.67%.