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savings account is set up, so that the simple interest earned on the investment is moved into separate account at the end of each year. If an investment of $7000 accumulate $910 of interest in the account after 2 years, what was the annual simple interest rate on the savings account?

Solution

Solution

Rate : (- 43.5%)

Solution steps

Translate the problem into an equation:

910 = 7000 (1 + r \cdot 2)

Solve for

r, 910 = 7000 (1 + r \cdot 2) : r = - 43.5%

Rate : (- 43.5%)

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