Maria earned $126 in simple interest from her savings account. If she invested $450 for 7 years, what was the interest rate?
Question 3 options:
4%
4.5%
5%
3.5%
To find the interest rate, we can use the formula for simple interest:
I = P * r * t
Where:
I = Interest earned
P = Principal (initial amount invested)
r = Interest rate
t = Time period in years
We are given:
I = $126
P = $450
t = 7 years
Plugging in the values into the formula, we get:
$126 = $450 * r * 7
We can rearrange the formula to solve for r:
r = $126 / ($450 * 7)
r = 0.04
So the interest rate is 4%, which is option 1.