Question

shawn deposited $90,000 in a savings account with simple interest. two years later, he had earned $12,600 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: List given values

$i = \$12,600$, $p = \$90,000$, $t = 2$ years

Step2: Rearrange formula for $r$

$r = \frac{i}{pt}$

Step3: Substitute values into formula

$r = \frac{12600}{90000 \times 2}$

Step4: Calculate decimal rate

$r = \frac{12600}{180000} = 0.07$

Step5: Convert to percentage

$0.07 \times 100 = 7$

Answer:

7%