Question

A bank deposit paying simple interest grew from an initial sum of $1000.00 to $1075.00 in 9 months. Find the interest rate.

Answer 1

The initial amount is, p = $1000.0

The final amount is, $1075.0

So the interest received is,

$1075-1000=75$

The time period is 9 months. Converting it into years,

$\frac{9}{12}=\text{0}.75\text{ years}$

We know that, the interest is calculated as,

$I=\text{prt}$

Here, r is the rate of interset, t is the time period, p is the initial amount.

So the rate of interest can be calculted as,

$r=\frac{I}{pt}=\frac{75}{1000\times0.75}=00.1$

The rate of interset is, 0.1%.