Sylvia bought a 6-month $1900 certificate of deposit. At the end of 6 months, she received a $209 simple interest. What rate of interest did the certificate pay
I = PRT
209 = 1900 * R * 0.5
209 = 950R
209/950 = R
0.263 = 26.3% = R
Sylvia bought a 6-month $600 certificate of deposit. At the end of 6 months, she received a $42 simple interest. What rate of interest did the certificate pay
To find the rate of interest that the certificate of deposit paid, we can use the formula for calculating simple interest:
Simple Interest = (Principal * Rate * Time) / 100
In this case, the principal is $1900 and the simple interest received at the end of 6 months is $209. We need to find the rate of interest.
Let's rearrange the formula to solve for the rate:
Rate = (Simple Interest * 100) / (Principal * Time)
Substituting the given values:
Rate = ($209 * 100) / ($1900 * 6/12)
Simplifying further:
Rate = $20900 / $950
Rate ≈ 0.219
Therefore, the rate of interest that the certificate of deposit paid is approximately 0.219 or 21.9% per year.