A bank account has a beginning balance of 560.00. After 6 months the balance in the account has increased to, $572.60. What interest rate is being earned annually on this account?

1 Answer
Oct 29, 2016

Answer:

#R = 4.5%#

Explanation:

Because the time period is not more than 1 year, it does matter whether the interest is simple or compound.

Over 6 months, #$12.60# has been earned in interest.

#SI = (PRT)/100" "larr# substitute what you know.

#12.60 = (560 xx R xx 6)/(100xx12)" " 6/12 = 1/2# year

Now solve for #R# by isolating it on the right.

#(12.60 xx 100xx12)/(560 xx6) = R#

#R = 4.5#