Maria invested $450 in a savings account and earned $126 in interest at the end of 7 years.

What was the interest rate?

A.
3.5%

B.
4%

C.
4.5%

D.
5%

Question

Maria invested $450 in a savings account and earned $126 in interest at the end of 7 years.

 

What was the interest rate?
  
 
 

 
 

  

  A. 
  3.5%   
   

 
 

  

  B. 
  4%   
   

 
 

  

  C. 
  4.5%   
   

 
 

  

  D. 
  5%

nurali · Answer

Interest = principal * interest rate expressed as a decimal * time in years. 
$126 = $450 * X * 7. Now multiply $450 * 7 years = $3,150 
$126 = 3,150X 
X=0.04=4%