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Jeremy is opening a savings account earning simple interest. He plans to deposit his $50 birthday money and leave the account alone until he goes to college. He will earn $5 per year in interest.

Respuesta :

Answer:

10%

Step-by-step explanation:

Use the formula of simple interest:

[tex]A=P(1+rt)[/tex]

We can determine the interest rate if he earns $5 a year. Which means after a year he will have $55. Let A be the final amount after year t with t=1:

[tex]55=50(1+r(1))[/tex]

Solve for r, the interest rate:

[tex]5=50r[/tex]

[tex]r=5/50=0.1[/tex]

Jeremy will earn money in the firsts year at a interest rate of 10%

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