Question

1. Marie deposits $125 in a savings account

that earns 3% simple annual interest. What
is the balance in the account after 3 years?

Answer 1

Explanation:

The formula for simple interest is

I = Prt

where I is the interest earned, P is the initial deposit, r is the rate in decimal form, and t is the time in years. For us,

I = 125(.03)(3) which gives us an interest amount of

I = 11.25

To find out how much money she has total after that interest builds up, we add that interest amount to the initial investement amount to get

125 + 11.25 = 136.25