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Suppose you deposited $100 in a savings account 4 years ago with a simple interest rate of 2%. The interest...

9. Suppose you deposited $100 in a savings account 4 years ago with a simple interest rate of 2%. The interest that you earned in those 4 years is $8.80. Which of the following is true? Select all that apply.
The interest rate is 0.022.
The principal was $100.
The interest earned is $4.
The account was opened 8 years and 8 months ago.

Answer

  1. The interest rate is 0.022. False. The interest rate is 2%, which is 0.02 as a decimal.

  2. The principal was $100. True. The initial deposit was $100.

  3. The interest earned is $4. False. The interest earned is $8.80.

  4. The account was opened 8 years and 8 months ago. False. The account was opened 4 years ago.

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