Question

Calculate the amount of money​ you'll have at the end of the indicated time period.

You invest ​$2000 in an account that pays simple interest of 4​% for 20 years.

Answer 1

The interest is $1600 and the amount is $3600.

Explanation:

STEP 1: Find an interest by using the formula I=P⋅i⋅t, where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.

In this example P = $2000, i = 4% and t = 20 years, so

III=P⋅i⋅t=2000⋅0.04⋅20=1600

STEP 2: Find an amount by using the formula A=P+I.

Since P = $2000 and I = $1600 we have

AAA=P+I=2000+1600=3600