Question

Edward deposited ​$7,500 into a savings account 2 years ago. The simple interest rate is 2​%. How much money did Edward earn in​ interest? What would be his new account​ balance?

Answer 1

The interest is $300 and the amount is $7800

Explanation:

Given

P = $7,500

i = 2​% = 0.02

t = 2 years

Using the formula

I = P × i × t

I = 7,500 × 0.02 × 2

I = $300

Thus, Edward earned an interest = $300

The amount in his new account bank can be calculated using the formula:

A = P + I

Since P = $7,500 and I = $300

A = P + I

= 7,500 + 300

= $7800

Thus, the new amount in his bank account = A = $7800

Therefore,

• The interest is $300 and the amount is $7800