Question

Jacob started a savings account with a 1% annual simple interest rate. His principal deposit was $147. He saved the money for 6 years. How much interest did he earn after 6 years?

Answer 1

The interest Jacob earns after 6 years is $8.82

Explanation:

The given parameters are;

The simple interest rate of the savings account, R = 1%

The principal deposit to the savings account, P = $147

The time duration Jacob saved the money, T = 6 years

The formula for simple interest, I, is given as follows;

`I = (P * R * T)/(100)`

Substituting the known values gives;

`I = (147 * 1 * 6)/(100) = 8.82`

The interest Jacob earns after 6 years = $8.82.