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If no money was deposited into or withdrawn from the account, what was the annual interest rate?

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Wugbug Wugbug · Answer 1 · 2016-12-02T14:24:31-05:00

Annual means yearly so you need to get the rate each year
156/5=31.2
31.2 Dollars every year
31.2/520=.06
.06*100=6% interest rate every year

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keshavgandhi04 keshavgandhi04 · Answer 2 · 2021-12-04T04:07:25-05:00

The annual interest rate is 6% and this can be determined by using the formula of simple interest and also by using the given data.

Given :

The formula of the simple interest can be used in order to determine the annual interest rate.

The formula of the simple interest is given by:

A = P(1 + rt)

where A is the final amount, P is the principal amount, r is the rate of interest, and t is the time in years.

Now, substitute the values of the known terms in the above formula.

520 + 156 = 520(1 + 5r)

Simplify the above expression in order to determine the value of 'r'.

676 = 520(1 + 5r)

1.3 = (1 + 5r)

0.3 = 5r

r = 0.06

Now, multiply by 100 in order to determine the percentage.

r = 0.06 $\times$ 100

r = 6%

So, the annual interest rate is 6%.

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