Owen deposited $900 in a savings account with simple interest. Two years later, he had earned $144 in interest. What was the interest rate?
I = PRT
144 = 900 * R * 2
144 = 1800R
144/1800 = R
Multiply the decimal answer by 100 to get the percentage.
To find the interest rate, we need to use the formula for simple interest:
Simple Interest = Principal * Rate * Time
In this case, the principal is $900, the time is 2 years, and the interest earned is $144. We can rearrange the formula to solve for the interest rate:
Rate = Simple Interest / (Principal * Time)
Plugging in the given values:
Rate = $144 / ($900 * 2)
Rate = $144 / $1800
Simplifying the fraction:
Rate = 0.08 (rounded to two decimal places)
Therefore, the interest rate is 8%.