A bank offers simple interest on a certificate of deposit. Jaime invests $500 and after one year earns $40 in interest. What was the interest rate on the certificate of deposit?

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A bank offers simple interest on a certificate of deposit. Jaime invests $500 and after one year earns $40 in interest. What was the interest rate on the certificate of deposit?

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Answer 1 · 2018-06-30T07:47:48

$8 %$ $8%$

Explanation:

$simple interest (I) is calculated using$ $"simple interest (I) is calculated using"$

$I = P R T$ $I=PRT$

$where P is the principal, R the rate of interest and T time$ $"where P is the principal, R the rate of interest and T time"$
$in years$ $"in years"$

$here I = 40, P = 500, R = ? and T = 1$ $"here "I=40, P=500 , R=? and T=1$

$rearrange the formula to solve for R$ $"rearrange the formula to solve for R"$

$R = \frac{I}{P T}$ $R=I/(PT)$

$color(white)(R)=40/(500xx1)=cancel(40)^4/cancel(500)^(50)=4/50=2/25$

$R=2/25xx100%=2/cancel(25)^1xxcancel(100)^4=8%$

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A bank offers simple interest on a certificate of deposit. Jaime invests $500 and after one year earns $40 in interest. What was the interest rate on the certificate of deposit?

1 Answer

Explanation:

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