Tim Invested $5,000 in a savings account for 6 years. He earned $550 over that fine period. What is the interest rate?

1.75 %

Step-by-step explanation:

The formula for the future value (FV) of an investment is

FV = PV (1 + r/n) ^nt

If the interest is calculated once a year, n = 1, and the formula reduces to

FV = PV (1 + r) ^t

5550 = 5000 (1 + r) ⁶ Divide both sides by 5000

1.110 = (1+r) ^6 Take the sixth root of each side

1 + r = 1.0175 Subtract 1 from each side

r = 0.0175 Convert to percent

r = 1.75 %

The interest rate is 1.75 %.