Erin Grabish recevied $2,000 for speaking at a financial planning seminar. Erin invested the money in a certificate of deposit for 2 years. When she redeemed the certificate of deposit, she received $2166. What simple interest rate did Erin receive on this certificate of deposit?
this problem has the same structure as the one I answered for you 4 minutes ago.
The only difference is that one has to conclude that the amount of interest is $166
let me know what rate you got.
i don't know how to work it. didn't work out.
Just like before
R = I/PT
= 166/(2000x2)
= 166/4000
= .0415
= 4.15%
its $2166 NOT $166
She deposited 2000 and got back 2166
how much did she make ?
Isn't that the interest ?
To find the interest rate, we can use the formula for simple interest:
Simple Interest = Principal x Rate x Time
In this case, the principal is the initial amount Erin invested, which is $2,000. The time is 2 years. We need to find the rate.
We can rearrange the formula to solve for the rate:
Rate = Simple Interest / (Principal x Time)
The simple interest is the final amount - the principal, which is $2166 - $2000 = $166.
Now we can calculate the rate:
Rate = $166 / ($2,000 x 2)
Rate = $166 / $4,000
Rate = 0.0415 or 4.15%
Therefore, Erin received a simple interest rate of 4.15% on the certificate of deposit.