To find the rate of interest earned, we can use the formula for simple interest:
I = P \cdot r \cdot t
Where:
- I is the interest earned,
- P is the principal (initial balance),
- r is the interest rate, and
- t is the time in years.
In this problem, we are given the principal (\$17,942.00) and the final balance after one year (\$18,928.91).
Substituting these values into the formula, we have:
18,928.91 - 17,942.00 = 17,942.00 \cdot r \cdot 1
Simplifying the equation:
986.91 = 17,942.00 \cdot r
To find the rate of interest (r), we can divide both sides of the equation by the principal (\$17,942.00):
\frac{986.91}{17,942.00} = r
Calculating this expression:
r \approx 0.055 = 5.5\%
Answer: The rate of interest earned is approximately 5.5%.