Question

Help Save&Exit Su Determine the interest rate earned on a $3,300 deposit when $3,900 is pald back in one year. (Round your answer to 2 places.) declmal t rate Next >

Answer 1

Interest amount should be calculated first by subtracting the present value from future value.

Interest amount = Future value – Present value

                           = 3,900 – 3,300

                           = $600

Now, the interest amount should be divided by the present value with a multiplication of 100 in order to get the interest rate.

Interest rate = (Interest amount / Present value) × 100

                    = ($600 / $3,300) × 100

                    = 18.18% (Answer)