Question

Liu deposited $3500 into a savings account 2 years ago. The simple interest rate is 4%. How much money did Lui earn in interest? What would the account earn in 10 years?

Answer 1

Liu earned $280 in simple interest over 2 years from a $3500 deposit with a 4% rate. In 10 years, the account would earn $1400 in simple interest using the same rate.

Step-by-step explanation:

To calculate the interest Liu earned on his $3500 deposit over 2 years at a simple interest rate of 4%, we use the simple interest formula:

I = P × r × t

Where:

• I is the interest
• P is the principal amount (initial deposit)
• r is the annual interest rate (in decimal form)
• t is the time in years the money is deposited

For the initial 2-year period:

I = $3500 × 0.04 × 2 = $280

Liu earned $280 in interest over the 2 years.

To find out how much the account would earn in 10 years:

I = $3500 × 0.04 × 10 = $1400

The account would earn $1400 in simple interest over 10 years.

Answer 2

• 2 years: $280
• 10 years: $1400

Step-by-step explanation:

The formula for simple interest is ...

i = Prt

where P is the principal, r is the annual rate, and t is the number of years.

a) Filling in the given values, we find the amount of interest to be ...

i = $3500·0.04·2 = $280 . . . . interest earned in 2 years

__

b) In 10 years, the account will earn ...

i = $3500·0.04·10 = $1400 . . . . earnings in 10 years