Question

Henry received $500 for his birthday which he intends to invest in an account that pays simple interest at the rate of 12% per year. How much will be in the account

Answer 1

$560

Explanation:

Given that :

Principal, P= $500

Interest rate, r = 12% per year

Amount in account after 1 year

Time = 1 year

Using the relation :

A = P(1 + rt)

A = final amount in account

A = $500(1 + 0.12(1))

A = $500(1 + 0.12)

A = $500(1.12)

A = $560