What is the interest rate on Ivy's account with a balance of $6,800 that earns $68 monthly in interest?

What is the interest rate on Ivy's account with a balance of $6,800 that earns $68 monthly in interest?

• A. A. 5.6%
• B. B. 8.3%
• C. C. 10%
• D. D. 12%

Answer: (D)

To determine the interest rate on Ivy's account, we can use the formula for calculating the monthly interest rate. The formula is as follows: \[ \text{Interest Rate} = \left( \frac{\text{Interest Earned}}{\text{Account Balance}} \right) \times 100 \] In this case, Ivy earns $68 in interest monthly on her account balance of $6,800. Applying the values to the formula gives us: \[ \text{Interest Rate} = \left( \frac{68}{6800} \right) \times 100 \] Calculating the fraction yields: \[ \frac{68}{6800} = 0.01 \] Now, multiplying this by 100 converts the decimal to a percentage: \[ 0.01 \times 100 = 1\% \] This figure represents the monthly interest rate. However, to find the annual interest rate, which is typically how interest is expressed, we multiply the monthly interest rate by 12: \[ 1\% \times 12 = 12\% \] This shows that the annual interest rate is 12%. Thus, the correct choice is the one that

To determine the interest rate on Ivy's account, we can use the formula for calculating the monthly interest rate. The formula is as follows:

[

\text{Interest Rate} = \left( \frac{\text{Interest Earned}}{\text{Account Balance}} \right) \times 100

]

In this case, Ivy earns $68 in interest monthly on her account balance of $6,800. Applying the values to the formula gives us:

[

\text{Interest Rate} = \left( \frac{68}{6800} \right) \times 100

]

Calculating the fraction yields:

[

\frac{68}{6800} = 0.01

]

Now, multiplying this by 100 converts the decimal to a percentage:

[

0.01 \times 100 = 1%

]

This figure represents the monthly interest rate. However, to find the annual interest rate, which is typically how interest is expressed, we multiply the monthly interest rate by 12:

[

1% \times 12 = 12%

]

This shows that the annual interest rate is 12%. Thus, the correct choice is the one that