Question

60 POINTS!! Please help me out with these 2 questions

1. A bank advertises that they will pay 1.5% simple annual interest on new savings accounts. Lorenzo puts $400 in a new account. If he does not deposit or withdraw any money, how much will he have?

2. Describe how to find the total amount to pay on a loan when paying simple interest.

Answer 1

1. money in the account = 400 + 6t where t is the number of years

2. Total cost = principal ( 1+ rate* time)

Explanation:

1. The formula for simple interest is I = PRT where

P = principal

R is the interest rate

T is the time in years

I = 400 * .015 * t

I = 6t where t is the number of year

The amount of money in the account is the principal plus the interest

money in the account = 400 + 6t

Since we were not given the time period, I will leave it here.

2. Since we are paying simple interest

The formula for simple interest is I = PRT where

P = principal

R is the interest rate

T is the time in years

We can figure out what the total interest is

Add it to the amount of the principal

The total amount you will pay on the loan is

Total cost = Principal + interest

= principal + principal * rate * time

= principal ( 1+ rate* time)