Questions: 4.13 Quiz: Simple Interest Tammi deposited 520 into a bank account that earned simple interest each year. After 5 years, she had earned 156 in interest. No money was deposited into or withdrawn from the account. What was the annual interest rate? Enter your answer in the box % 1 2 3 4 5

4.13 Quiz: Simple Interest

Tammi deposited 520 into a bank account that earned simple interest each year. After 5 years, she had earned 156 in interest. No money was deposited into or withdrawn from the account.

What was the annual interest rate?

Enter your answer in the box

%

1 2 3 4 5

Transcript text: 4.13 Quiz: Simple Interest Tammi deposited $520 into a bank account that earned simple interest each year. After 5 years, she had earned $156 in interest. No money was deposited into or withdrawn from the account. What was the annual interest rate? Enter your answer in the box % 1 2 3 4 5

Solution

Solution Steps

Step 1: Identify the given values

Principal amount $ P = \$520 $
Time $ t = 5 $ years
Simple interest earned $ I = \$156 $

Step 2: Write the formula for simple interest

The formula for simple interest is: \[ I = P \cdot r \cdot t \] where $ r $ is the annual interest rate.

Step 3: Solve for the annual interest rate $ r $

Rearrange the formula to solve for $ r $: \[ r = \frac{I}{P \cdot t} \] Substitute the given values: \[ r = \frac{156}{520 \cdot 5} \] \[ r = \frac{156}{2600} \] \[ r = 0.06 \]

Step 4: Convert the decimal to a percentage

Multiply $ r $ by 100 to express it as a percentage: \[ r = 0.06 \times 100 = 6\% \]