Question

You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate

A) 6% B) 5% C) 7% D) 8%

Answer 1

Answer:  

A) 6%

Explanation:

1. To find the interest, subtract the principal from the balance.

      $618 - $600 = $18

2.Use the simple interest formula and solve for r.

      I = Prt

     18= 600 x r x (1/2)

      r= 0.06 =6%