Question

A savings account pays 1/2% simple interest per year. Anna opens an account and deposits $600. After that, she does not withdraw or deposit any more money? How much will be in the account after on year?

Answer 1

$603

Explanation:

The amount of interest is given by ...

I = Prt

where P is the principal ($600), r is the interest rate (0.005), and t is the time in years (1). Then the amount of interest after 1 year is ...

I = $600·.005·1 = $3

That is added to the account balance, so the total is ...

$600 + $3 = $603 . . . . end-of-year balance