Bob invested one half of his savings in a bond that paid simple interest for 2 years and received $450 as interest. He invested the remaining in a bond that paid compound interest (compounded annually) for the same 2 years at the same rate of interest and received $605 as interest. What was the annual rate of interest?  Options.
A) 68%
B) 10%
C) 12%
D) 15%
E) 20%
First divide $450/2years to get 225$/yr non-compounding interest.   Next, subtract from the total compound after 2 years to see the interest gained in the second year. This can be done because the same amount has been invested in both accounts and the interest gained for the first year will be the same. So, $605-$225= $380.   To find the difference in interest gained, $380-$225= $155 increase in interest after the first year through compounding.   From this information we can set up the equation $225 * X% = $155=68% giving us answer choice 68%.
<result>A</result>
Bob invested one half of his savings in a bond that paid simple interest for 2 years and received $450 as interest. He invested the remaining in a bond that paid compound interest (compounded annually) for the same 2 years at the same rate of interest and received $605 as interest. What was the annual rate of interest?