CFA Level 1: Simple Interest Rate Calculation

Simple Interest Rate Calculation

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Question

What simple annual interest rate would cause a $200 deposit to earn $15 interest in one year?

Answers

Explanations

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A. B. C. D. E.

D

To solve this question, rearrange the simple interest formula I=PRT to isolate R. On the BAII Plus, press 15 divide 200 divide 1 = to see the answer. On the

HP12C, press 15 ENTER 200 divide 1 divide to see the answer. Note that the final division by 1 (which is the time T in this question) is not necessary.