Answer:
The interest rate is 7%
Explanation:
In order to calculate this we have to know what a simple interest is; it is fees paid on an investment or loan over a period of time, where the interest is not compounded.
Mathematically, simple interest is represented as;
Interest = P×R×T
where P= principal (deposited amount) = 275
R = Interest rate
T = time in years = 1 year
In our example, the final amount has been given, hence, we can calculate interest, which is the final amount - the deposited amount
Interest = 294.25 - 275 = 19.25
∴ 19.25 = 275 × R × 1
= 19.25 = 275R
∴ R = 19.25 ÷ 275 = 0.07
Rate = 0.07 = 7/100
therefore interest rate = 7%
