Mrs. Hernandez opened an account with a deposit of $3,500.
The account earned annual simple interest.
She did not make any additional deposits or withdrawals.
At the end of 6 years, the balance of the account was $4,865.
What is the annual interest rate on this account?
7.2%
2.3%
5.3%
6.5%
To calculate the annual interest rate on this account, we can use the formula for simple interest:
Interest = Principal x Rate x Time
In this case, the initial deposit was $3,500 and after 6 years it grew to $4,865. So the interest earned over 6 years is:
865 = 3500 x Rate x 6
Solving for the annual interest rate:
Rate = 865 / (3500 x 6) = 0.0412 or 4.12%
Therefore, the annual interest rate on this account is 4.12%, which is not one of the options provided. This suggests that the correct answer may not have been provided as an option.