Since simple interest doesn't involve compounding, the same amount gets added on every year. So, the equation for the simple interest received is \(I = Prt\), where \(I\) is the total interest, \(P\) is the original deposit (or "principal"), \(r\) is the interest rate, and \(t\) is the time passed in years.
Plugging in our values, we can solve for the interest rate:
\(I = Prt\)
\(\$1380 - \$1200 = (\$1200)(r)(3 years)\)
\(\$180 = (\$1200)(r)(3 years)\)
\(r = .05 = \bf 5 \%\)
