Question

Tracy started a savings account that is set up so that the simple interest earned on the investment is moved into a separate account at the end of each year. Tracy invests $5,000 at 4.5%, what is the total simple interest accumulated in the checking account after 2 years? (1 pt) * a) $4.50 b) $45 c) $450 d) $4,500 e) $45,000

Answer 1

Given:

Tracy invests $5,000 at 4.5% and the simple interest earned on the investment is moved into a separate account at the end of each year.

To Find:

The total simple interest accumulated in the checking account after 2 years.

Answer:

$450 is the total simple interest accumulated in the checking account after 2 years.

Explanation:

The principal sum invested by Tracy is $5000.

The rate of simple interest is given to be 4.5% and the time period given is 2 years.

To calculate the total amount of interest accrued we use the formula

`(P.R.T)/(100)`

where P is the pricipal amount of money, R is the rate of interest and T is the time period.

So, putting the given values into the formula, we have

`((5000)(4.5)(2))/(100)\\\\=(45000)/(100)\\\\=450`

Thus, $450 is the total simple interest accumulated in the checking account after 2 years.