grayson deposited $5,000 in a savings account with simple interest. three months later, he had earned…

grayson deposited $5,000 in a savings account with simple interest. three months later, he had earned $162.50 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.

grayson deposited $5,000 in a savings account with simple interest. three months later, he had earned $162.50 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.

Answer

Explanation:

Step1: Identify values of i, p and t

$i = 162.50$, $p=5000$, $t=\frac{3}{12}= 0.25$ (since 3 months is $\frac{3}{12}$ years)

Step2: Rearrange the formula for r

From $i = prt$, we can solve for $r$ as $r=\frac{i}{pt}$.

Step3: Substitute values to find r

$r=\frac{162.50}{5000\times0.25}=\frac{162.50}{1250}=0.13$

Answer:

$0.13$