susan bought a 6 month $1,700 certificate of deposit.At the end of six months she received $63 simple interest. what annual rate of interest did the certificate pay?
In a year then it would be 2 times $63
So $1700 times the rate of interest (we will call it X) will equal the interest.
Thus the equation
1700X=(63)(2)
solve for x
X=.074
or 7.4%
To find the annual rate of interest, we can use the formula:
Simple Interest = Principal x Rate x Time
Given:
Principal (P) = $1700
Simple Interest (I) = $63
Time (T) = 6 months = 0.5 years
We want to find the rate (R).
Plugging in the given values into the formula, we get:
$63 = $1700 x R x 0.5
To solve for R, divide both sides of the equation by $850 and 0.5:
R = $63 / ($1700 x 0.5)
R = $63 / $850
R = 0.074
So, the rate of interest on the certificate of deposit is 0.074 or 7.4% annually.
To find the annual rate of interest, we can follow these steps:
Step 1: Determine the total interest received in a year.
Since Susan received $63 in six months, we need to double this amount to calculate the annual interest. Therefore, the total interest received in a year is $63 x 2 = $126.
Step 2: Set up an equation.
Let's assume the annual interest rate is represented by X. We can set up the equation: $1700 * X = $126.
Step 3: Solve for X.
To solve for X, divide both sides of the equation by $1700:
X = $126 / $1700.
Step 4: Convert to a percentage.
To express the annual interest rate as a percentage, multiply the result from Step 3 by 100 and add the "%" symbol, giving us X = 0.074. Multiply 0.074 by 100 to get the percentage, which is 7.4%.
Therefore, the annual rate of interest for the certificate of deposit is 7.4%.