Maria earned $126 in simple interest from her savings account. If she invested $450 for 7 years, what was the interest rate?

Question

Question 3 options:

4%

4.5%

5%

3.5%

Answer 1

To find the interest rate, we can use the formula for simple interest:

I = P * r * t

Where:
I = Interest earned
P = Principal (initial amount invested)
r = Interest rate
t = Time period in years

We are given:
I = $126
P = $450
t = 7 years

Plugging in the values into the formula, we get:

$126 = $450 * r * 7

We can rearrange the formula to solve for r:

r = $126 / ($450 * 7)
r = 0.04

So the interest rate is 4%, which is option 1.