Question

The starting principal for a savings account is $300. If there are no additional deposits or withdrawals, at a simple interest rate of 3.5%, what will be the account balance after 5 years?

pls help

Answer 1

$352.50

Explanation:

We can use simple interest formula to solve this. The formula is:

`i=Prt`

i is the interest amount

P is the principal amount

r is the rate of interest (in decimal)

t is the time in years

Lets find the interest and then add it to principal to find the balance after 5 years.

Given:

P = 300

r = 3.5% = 3.5/100 = 0.035

t = 5

Substituting we find the interest:

`i=Prt\\i=300*0.035*5\\i=52.5`

So $300 earns $52.50, so total balance would be:

300 + 52.50 = $352.50