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Simple Interest, SMB-022

The transaction details for a savings account for the month of August 2014 are shown in the table below.

The table is incomplete.
  

 

Simple interest is calculated and paid monthly on the minimum balance for that month.

Calculate the annual simple interest rate paid on this account, correct to two decimal places.   (4 marks)

--- 5 WORK AREA LINES (style=lined) ---

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`text{3.75%}`

Show Worked Solution

`text(Minimum balance for month) = $4870.50`

`text{Interest paid}\ = 5885.72-5870.50= $15.22`

`I` `=Prn`
`15.22` `= 4870.50 xx r xx 1/12`
`:. r`  `=(15.22 xx 12)/4870.50`
  `= 0.03749…`
  `= 3.75text{%   (2 d.p.)}`

Filed Under: Simple Interest Tagged With: num-title-ct-corea, smc-4332-20-Find interest rate, smc-4332-40-Bank statement

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