Question

erica deposited $60 in a savings account with simple interest. one year later, she had earned $1.20 in interest. what was the interest rate? use the formula $i = prt$, where $i$ is the interest earned, $p$ is the principal (starting amount), $r$ is the interest rate expressed as a decimal, and $t$ is the time in years.

Explanation:

Step1: Identify known values

We know that \( i = 1.20 \), \( p = 60 \), and \( t = 1 \) (since the time is 1 year). The formula for simple interest is \( i = prt \).

Step2: Substitute values into the formula

Substitute the known values into the formula: \( 1.20 = 60\times r\times1 \).

Step3: Solve for \( r \)

Simplify the right - hand side: \( 1.20 = 60r \). Then divide both sides by 60 to solve for \( r \): \( r=\frac{1.20}{60}=0.02 \).

Step4: Convert decimal to percentage

To convert the decimal \( r = 0.02 \) to a percentage, we multiply by 100. So \( 0.02\times100 = 2\% \).

Answer:

2