Question

Pam invested $4200 in a savings account with a yearly interest rate of 4% for 7 years. How much simple interest did she earn? A. $1176 B. $578 C. $152 D. $1422

Answer 1

4200 * 4% * 7 = 1176

Your answer is A.

Answer 2

A. $1176

Explanation:

Using the formula for simple interest:

A = P(1+rt)

Where:

A = Total Accrued Amount (principal + interest)

P = Principal Amount

r = Rate of Interest per year in decimal

t = Time in years

Substituting the values:

A=4200(1+0.04(7))

A= $5376

A is the total accrued amount, which means to find the interest paid over the three years, subtract the principal amount. So the interest is 5376-4200=1176