After 3 Months, $3,000 Deposited In A Savings Account With Simple Interest Had Grown To A Total Of $3,052.50. What Was The Interest Rate?Use The Formula I = P R T I = Prt I = P R T , Where I I I Is The Interest Earned, P P P Is The

Introduction

In the world of finance, understanding interest rates is crucial for making informed decisions about investments and savings. In this article, we will delve into the concept of simple interest and explore how to calculate the interest rate using a real-world example. We will use the formula $i = prt$, where $i$ is the interest earned, $p$ is the principal amount, $r$ is the interest rate, and $t$ is the time period.

Understanding Simple Interest

Simple interest is a type of interest that is calculated only on the initial principal amount. It does not take into account the interest that has already been earned. The formula for simple interest is:

$$i = prt$$

Where:

• $i$ is the interest earned
• $p$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Calculating Interest Rate

In this example, we are given that $3,000 was deposited in a savings account with simple interest for 3 months, and the total amount after 3 months is $3,052.50. We need to find the interest rate.

First, let's calculate the interest earned:

$$i = p \times r \times t$$

We know that $p = 3,000$, $t = 3$ months, and $i = 3,052.50 - 3,000 = 52.50$. Now, we need to find the interest rate $r$.

Using the Formula to Find Interest Rate

Rearranging the formula to solve for $r$, we get:

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

Substituting the values, we get:

$$r = \frac{52.50}{3,000 \times 3}$$

$$r = \frac{52.50}{9,000}$$

$$r = 0.005833$$

Converting Interest Rate to Percentage

To express the interest rate as a percentage, we multiply by 100:

$$r = 0.005833 \times 100$$

$$r = 0.5833\%$$

Conclusion

In this article, we used the formula $i = prt$ to calculate the interest rate for a savings account with simple interest. We were given that $3,000 was deposited for 3 months, and the total amount after 3 months is $3,052.50. We calculated the interest earned and used the formula to find the interest rate, which is approximately 0.5833%.

Real-World Applications

Understanding interest rates is crucial for making informed decisions about investments and savings. In the real world, interest rates can have a significant impact on the economy and individual financial decisions. For example, a high interest rate can make borrowing more expensive, while a low interest rate can make borrowing cheaper.

Tips and Tricks

• Always use the formula $i = prt$ to calculate interest earned.
• Make sure to use the correct values for principal amount, time period, and interest earned.
• Convert the interest rate to percentage by multiplying by 100.

Frequently Asked Questions

• What is simple interest? Simple interest is a type of interest that is calculated only on the initial principal amount.
• How do I calculate interest earned? Use the formula $i = prt$, where $i$ is the interest earned, $p$ is the principal amount, $r$ is the interest rate, and $t$ is the time period.
• How do I find the interest rate? Rearrange the formula to solve for $r$, and substitute the values for interest earned, principal amount, and time period.
  Frequently Asked Questions: Simple Interest and Interest Rates ================================================================

Q: What is simple interest?

A: Simple interest is a type of interest that is calculated only on the initial principal amount. It does not take into account the interest that has already been earned.

Q: How do I calculate interest earned?

A: To calculate interest earned, use the formula $i = prt$, where $i$ is the interest earned, $p$ is the principal amount, $r$ is the interest rate, and $t$ is the time period.

Q: How do I find the interest rate?

A: To find the interest rate, rearrange the formula to solve for $r$, and substitute the values for interest earned, principal amount, and time period.

Q: What is the formula for simple interest?

A: The formula for simple interest is:

$$i = prt$$

Where:

• $i$ is the interest earned
• $p$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Q: What is the difference between simple interest and compound interest?

A: Simple interest is calculated only on the initial principal amount, while compound interest is calculated on both the principal amount and any accrued interest.

Q: How do I calculate compound interest?

A: To calculate compound interest, use the formula:

$$A = P(1 + r)^t$$

Where:

• $A$ is the amount after $t$ periods
• $P$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Q: What is the interest rate?

A: The interest rate is the percentage of the principal amount that is earned as interest over a given time period.

Q: How do I convert the interest rate to a percentage?

A: To convert the interest rate to a percentage, multiply by 100.

Q: What is the time period?

A: The time period is the length of time over which the interest is earned.

Q: How do I calculate the time period?

A: The time period can be calculated in years, months, or days, depending on the context.

Q: What is the principal amount?

A: The principal amount is the initial amount of money that is invested or borrowed.

Q: How do I calculate the principal amount?

A: The principal amount is the initial amount of money that is invested or borrowed.

Q: What is the interest earned?

A: The interest earned is the amount of money that is earned as interest over a given time period.

Q: How do I calculate the interest earned?

A: To calculate the interest earned, use the formula $i = prt$, where $i$ is the interest earned, $p$ is the principal amount, $r$ is the interest rate, and $t$ is the time period.

Q: What is the formula for interest earned?

A: The formula for interest earned is:

$$i = prt$$

Where:

• $i$ is the interest earned
• $p$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Q: How do I use the formula to find the interest rate?

A: To use the formula to find the interest rate, rearrange the formula to solve for $r$, and substitute the values for interest earned, principal amount, and time period.

Q: What is the interest rate formula?

A: The interest rate formula is:

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

Where:

• $r$ is the interest rate
• $i$ is the interest earned
• $p$ is the principal amount
• $t$ is the time period

Q: How do I convert the interest rate to a decimal?

A: To convert the interest rate to a decimal, divide by 100.

Q: What is the decimal equivalent of the interest rate?

A: The decimal equivalent of the interest rate is the interest rate divided by 100.

Q: How do I use the decimal equivalent to find the interest rate?

A: To use the decimal equivalent to find the interest rate, multiply by 100.

Q: What is the interest rate in decimal form?

A: The interest rate in decimal form is the interest rate divided by 100.

Q: How do I convert the interest rate from decimal to percentage?

A: To convert the interest rate from decimal to percentage, multiply by 100.

Q: What is the interest rate in percentage form?

A: The interest rate in percentage form is the interest rate multiplied by 100.

Q: How do I use the interest rate in percentage form to find the interest earned?

A: To use the interest rate in percentage form to find the interest earned, use the formula $i = prt$, where $i$ is the interest earned, $p$ is the principal amount, $r$ is the interest rate, and $t$ is the time period.

Q: What is the interest earned formula?

A: The interest earned formula is:

$$i = prt$$

Where:

• $i$ is the interest earned
• $p$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Q: How do I use the interest earned formula to find the interest rate?

A: To use the interest earned formula to find the interest rate, rearrange the formula to solve for $r$, and substitute the values for interest earned, principal amount, and time period.

Q: What is the interest rate formula?

A: The interest rate formula is:

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

Where:

• $r$ is the interest rate
• $i$ is the interest earned
• $p$ is the principal amount
• $t$ is the time period

Q: How do I use the interest rate formula to find the interest earned?

A: To use the interest rate formula to find the interest earned, rearrange the formula to solve for $i$, and substitute the values for interest rate, principal amount, and time period.

Q: What is the interest earned formula?

A: The interest earned formula is:

$$i = prt$$

Where:

• $i$ is the interest earned
• $p$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Q: How do I use the interest earned formula to find the interest rate?

A: To use the interest earned formula to find the interest rate, rearrange the formula to solve for $r$, and substitute the values for interest earned, principal amount, and time period.

Q: What is the interest rate formula?

A: The interest rate formula is:

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

Where:

• $r$ is the interest rate
• $i$ is the interest earned
• $p$ is the principal amount
• $t$ is the time period

Q: How do I use the interest rate formula to find the interest earned?

A: To use the interest rate formula to find the interest earned, rearrange the formula to solve for $i$, and substitute the values for interest rate, principal amount, and time period.

Q: What is the interest earned formula?

A: The interest earned formula is:

$$i = prt$$

Where:

• $i$ is the interest earned
• $p$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Q: How do I use the interest earned formula to find the interest rate?

A: To use the interest earned formula to find the interest rate, rearrange the formula to solve for $r$, and substitute the values for interest earned, principal amount, and time period.

Q: What is the interest rate formula?

A: The interest rate formula is:

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

Where:

• $r$ is the interest rate
• $i$ is the interest earned
• $p$ is the principal amount
• $t$ is the time period

Q: How do I use the interest rate formula to find the interest earned?

A: To use the interest rate formula to find the interest earned, rearrange the formula to solve for $i$, and substitute the values for interest rate, principal amount, and time period.

Q: What is the interest earned formula?

A: The interest earned formula is:

$$i = prt$$

Where:

• $i$ is the interest earned
• $p$ is the principal amount
• $r$ is the interest rate
• $t$ is the time period

Q: How do I use the interest earned formula to find the interest rate?

A: To use the interest earned formula to find the interest rate, rearrange the formula to solve for $r$, and substitute the values for interest earned, principal amount, and time period.

Q: What is the interest rate formula?

A: The interest rate formula is:

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

Where:

• $r$