Answer:
A = $996.00
Explanation:
(I = A - P = $196.00)
Equation:
A = P(1 + rt)
Where:
A = Total Accrued Amount (principal + interest)
P = Principal Amount
I = Interest Amount
r = Rate of Interest per year in decimal; r = R/100
R = Rate of Interest per year as a percent; R = r * 100
t = Time Period involved in months or years
From the base formula, A = P(1 + rt) derived from A = P + I and I = Prt so A = P + I = P + Prt = P(1 + rt)
Calculation:
First, converting R percent to r a decimal
r = R/100 = 7%/100 = 0.07 per year.
Solving our equation:
A = 800(1 + (0.07 × 3.5)) = 996
A = $996.00
The total amount accrued, principal plus interest, from simple interest on a principal of $800.00 at a rate of 7% per year for 3.5 years is $996.00.