SOLUTION: I have this question on my homework: You put $500 in a savings account. The account earns $15.75 simple interest in 6 months. What is the annual interest rate? I know the formula i

Question 726666: I have this question on my homework: You put $500 in a savings account. The account earns $15.75 simple interest in 6 months. What is the annual interest rate? I know the formula is But how do I set the problem up?
Answer by KMST(5328) (Show Source): You can put this solution on YOUR website!

= Interest earned
= Principal (amount deposited)
= time (in years, because you want the annual interest rate)
= Interest rate (expressed as a decimal)

For your problem
or
That is -->
The annual interest rate is 6.3%.

MENTAL MATH
If you had left the money in that account for 1 year, you would have earned double the amount you earned in interest.
If you had been able to deposit twice as much ($1000) and let that money earning interest for 1 year you would have earned 4 times as much as you did.
15 dollars is 60 quarters, so 15.75 dollars is 63 quarters.
4 times 63 quarters is 63 dollars.
$1000 would earn $63 in 1 year, so $100 would earn $6.30 in a year,
so the annual interest rate is 6.3%.
I can think through that a lot faster than I can type it.
RELATED QUESTIONS
taylor earns 2.1% simple interest per year on her savings. if she puts $500 into a... (answered by fractalier)

taylor earns 2.1% simple interest per year on her savings. if she puts $500 into a... (answered by fractalier)

6) John put $1,200 in a savings account. The account earns 3.5% simple interest. At the... (answered by ikleyn)

you put 1500 in a simple interest savings account two years later the total account... (answered by josgarithmetic)

I plan on retiring in 35 years. I hope to have $750,000 in my savings account when I... (answered by Boreal)

Hello, I am having trouble understanding and solving this problem: Mrs. Mitchell put a (answered by josgarithmetic)

elmer put 500 dollars in a bank account. each year the account earns 8% simple interest.... (answered by rfer)

Your favorite aunt put money in a savings account for you. The account earns simple... (answered by KMST)

7TH GRADE MATH Rachel earns 2% simple annual interest on the money she has in her... (answered by Theo)