Question

After 8 years, Ofelia earned $980 in simple interest from a CD into which she initially deposited $7000. What was the annual interest rate of the CD?

Answer 1

The simple interest formula is;


So when we substitute in values that we know we get;
\[980 = (7000) (r) (8)\]

So now we need to find rate, we use this;
\[r = \frac{ \left( 980 \right) }{ \left( 7000 \right)\left( 8 \right) }\]

What is the value of r, or the rate?