Math

Asher cashed in a one-year term deposit after only five months had elapsed. In order to do so, he accepted an interest rate penalty—a reduction from the scheduled 5.5% rate of simple interest. If he was paid $145.83 interest on the $10,000 term deposit, what reduction was made in the per annum rate of simple interest?

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  1. I = PRT

    145.83 = 10,000 * R * 0.4167

    148.83 = 4,166.67R

    148.83/4,166.67 = R

    0.0357 = R

    3.57% = R

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    Ms. Sue

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