1. ## GRE Math

I guess I have no place to put it but here.....

A certain money market accout that has a balance of $48000 during all of the last month earned$360 in simple interest for the the month. At what simpe annual rate did the account earned interest last month?

A. 7%
B. 7.5%
C. 8%
D. 8.5%
E. 9%

I understand that you are supposed to use I = P R T....but are we always supposed to assume that the T is in years regardless if I and P are in months?

2. I would say $360\times 12 = 4320$ gives the yearly amount of potential interest earnt. Now divide this by the initial amount to get the interest rate

$\frac{4320}{48000} = 0.09 = 9\%$

3. Originally Posted by pickslides
I would say $360\times 12 = 4320$ gives the yearly amount of potential interest earnt. Now divide this by the initial amount to get the interest rate

$\frac{4320}{48000} = 0.09 = 9\%$
so they 48000 is the yearly interest. How can we tell in that problem since the units in that problem is in months?

4. Interest in calculated on the amount in the account i.e $48,000. If the interest is calculated yearly but pain monthly then for it is done as follows.$48,000 is the monthly amount paid at 9% annually is

$9\% \times \48,000 = \4,320$

But this is an annual amount so to make it monthly divide by 12.

$\4,320 \div 12 = \ 360$