Answer:
The interest after 54 month is $2970 and the rate is 4%.
Step-by-step explanation:
The amount of interest gathered in 54 months is equal to the final amount subtracted by the initial one. We have:
interest = 19470 - 16500
interest = $2970
In order to calculate the rate we need to apply the formula for simple interest shown below:
interest = C*r*t
Where C is the initial amount, r is the rate of interest and t is the time elapsed in years. We have:
2970 = 16500*r*(54/12)
2970 = 16500*r*(4.5)
74250*r = 2970
r = 2970/74250
r = 0.04
The rate is r*100% = 4% per year.
