SOLUTION: nadia put $500 into a savings account. at the end of 1 year, she has earned $30 in interest. what interest rate was the bank paying? What is the answer? How did you get the answ

Question 961172: nadia put $500 into a savings account. at the end of 1 year, she has earned $30 in interest. what interest rate was the bank paying?
What is the answer? How did you get the answer? How would you write this as a proportion/ratio?
Answer by rothauserc(4718) (Show Source): You can put this solution on YOUR website!
we use the compound interest formula A = P(1 +r/n)^nt where A is amount including interest, P is principal amount, r is interest rate, n is number of times interest rate is compounded in a year, t is number of years
for this problem, n=1 and t=1, therefore
A = P(1+r)
solve for r
r = (A/P) -1 = 530/500 -1 = .06
the rate is 6% or .06 per year
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alternate way to calculate is 30/500 = 6% or interest/principal

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