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1 January, 18:49

You put $400 in a account. The account earns $18 simple interest in 9 months. What is the annual interest rate?

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  1. 1 January, 20:50
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    Use the formula,

    I = Prt

    P = Principal amount = 400

    I = interest = 18

    r = annual rate

    t = time in years = 9/12 = 3/4

    so,

    18 = 400*r*3/4

    r = 0.06

    so the annual interest rate is 0.06 or 6%.
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