Macy currently has a balance of $3,418.82 in an account earning simple interest. Eighteen years ago she opened the account with an initial deposit of $2,481. What is the interest rate on the account?

Question

anonymous · Answer

@johnweldon1993

johnweldon1993 · Answer

So simple interest has the formula

$$\large I = PRT$$

Where I = interest earned
P = principle balance
R = rate (what we want)
T = time in years

anonymous · Answer

ok

johnweldon1993 · Answer

So we have T = 18 years
P = the original 2481.00
R is what we want

And to solve for I...since I = the interest earned...we need to do what she has in the account NOW - the original amount right?

So first I = 3418.82 - 2481.00

After you find the I, plug it into the original formula and solve for R

anonymous · Answer

I= 937.82

anonymous · Answer

so then i plug that and i multiply?

johnweldon1993 · Answer

Well yes now you plug it in

$$\large 937.82 = 2481.00 \times R \times 18$$

Which means

$$\large R = \frac{937.82}{2481\times 18}$$

anonymous · Answer

thank you can you help me on another one @johnweldon1993