You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate
A. 6%
B. 5%
C. 7%
D. 8%
1. To find the interest, subtract the principal from the balance.
$618 – $600 = $18
2.Use the simple interest formula and solve for r.
I = Prt
18= 600 x r x (1/2)
r= 0.06 =6%