You put $150 in the bank two years ago and forgot about it.The bank sends you a notice that you now have $166.95 in your account.What interest rate did you earn?
A) 5.50 percent
B) 5.65 percent
C) 6.25 percent
D) 7.05 percent

Question

Quizplus · Accepted Answer

The interest rate is 5.50 percent.The formula for calculating the interest rate is:I = P * r * twhere:I is the interest earnedP is the principal (the amount of money you deposited)r is the interest ratet is the time (in years)In this case, we have:I = $166.95 - $150 = $16.95P = $150t = 2 yearsSo, we can solve for r:r = I / (P * t)r = $16.95 / ($150 * 2 years)r = 0.055r = 5.50%

You Put $150 in the Bank Two Years Ago and Forgot