Question

You put $400 in a savings account. The account earns 2% simple interest per year. A. What is the interest earned after 6 years? The interest earned is $ after 6 years. B. What is the balance after 6 years? The balance is $ after 6 years.

Answer 1

Explanation:

for the each year, the interest is increased by 2%,

so after 1 year, earned interest is 2% of $400

=2/100 × 400=$8

so the earned balance is $(400+8)=$408

so after 2 year, earned interest is 2% of $408

=2/100 × 408=$8.16

so the earned balance is $(408+8.16)=$416.16

after 3 year, earned interest is 2% of $416.16

=2/100 × 416.16=$8.32

so the earned balance is $(416.16+8.32)=$424.48

after 4 year, earned interest is 2% of $424.48

=2/100 × 424.48=$8.48

so the earned balance is $(424.48+8.48)=$480.48

after 5 year, earned interest is 2% of $480.48

=2/100 × 480.48=$9.6

so the earned balance is $(480.48+9.6)=$490.08

after 6 year, earned interest is 2% of $490.08

=2/100 × 490.08=$9.8

so the earned balance is $(490.08+9.8)=$499.88

therefore the interest earned after 6 years is

$(8+8.16+8.32+8.48+9.6+9.8)=$52.36

and the balance after 6 years is $499.88