Question

1.)If The simple interest on $1,000 for 2 years is $160, then what is the interest rate?

2.)A new bank customer with $2,000 wants to open an IRA to earn money for retirement. The bank is offering a simple interest rate of 9%. How much interest will the customer earn in 20 years? In 30 years? What will be the account balance after 20 years? After 30 years?

3.)Edward deposited $7,000 into a savings account 3 years ago. The simple interest rate is 3%. How much money did Edward earn in interest? What would be his new account balance?

(Pls help me, ASAP)

Answer 1

Please see the detailed answer below:

Explanation:

1.)

Interest Rate = Interest / (Principal x Time)

Interest Rate = $160 / ($1,000 x 2)

Interest Rate = $160 / $2,000

Interest Rate = 0.08

Interest Rate = 8%

2.)

Interest in 20 Years

Interest = Interest Rate x Principal x time

Interest = 0.09 x $2,000 x 20

Interest = $3,600

Account Balance after 20 Years

Account Balance = Principal + Interest

Account Balance = $2,000 + $3,600

Account Balance = $5,600

Interest in 30 Years

Interest = Interest Rate x Principal x time

Interest = 0.09 x $2,000 x 30

Interest = $5,400

Account Balance after 30 Years

Account Balance = Principal + Interest

Account Balance = $2,000 + $5,400

Account Balance = $7,400

3.)

Interest = Interest Rate x Principal x time

Interest = 0.03 x $7,000 x 3

Interest = $630

Account Balance after 3 Years

Account Balance = Principal + Interest

Account Balance = $7,000 + $630

Account Balance = $7,630