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19 August, 12:53

Li deposited $17,500 into a bank account that earned simple interest each year. After 2 years, he had earned $2975 in interest.

If no money was deposited into or withdrawn from the account, what was the annual interest rate?

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  1. 19 August, 13:09
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    Let x is the interest rate

    $17,500 * 2 * x = $2975

    $35,000x = $2,975

    x = $2,975/$35,000

    x = 0.085

    0.085 * 100 = 8.5%

    Answer: annual interest rate was 8.5%
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