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What is the annual interest rate on an account in which earns $948 in simple interest over 36 months along with an initial deposit of $7,900?
Using the easy interest formula Interest = principal × rate × time, or I = prt, substitute p = $1,250, r = 0.034 (the interest rate as a decimal), and t = 1.5 (18 months is equal to 1.5 years); I = (1,250)(.034)(1.5). Multiply to obtain a result of I = $63.75. To ?nd the total amount in the account after 18 months, add the interest rate to the initial principal. $63.75 + $1,250 = $1313.75.
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