Question

An account pays 8% per year simple interest. In year 1, the amount in the account is $850. How much is in the account in year 6? A. $1190.00 B. $1130.00 C. $1209.85 D. $1248.93

Answer 1

Amount in year 6 = $1190

Explanation:

An account pays 8% per year simple interest. In year 1, the amount in the account is $850.

Simple interest formula= P*n * r

P- principal amount= 850

n - number of years= 1

r - rate of interest 8%= 0.08

Simple interest I = 850 * 1* 0.08 = 68

Interest for 1 year = $68

Interest for 5 years = 68* 5 = 340

Amount in the account in year 6 = amount in the account + interest for 5 years

= 850 + 340 = 1190

Answer 2

In year 1 : $850

Simple interest = P * n * r

P = $850, n = 1 ( one year ), r = 8% = 0.08

850 * 1 * 0.08 = $68 ( interest for one year)

In year 6 the amount is:

850 + 5 * 68 = 850 + 340 = 1190

Answer:

A ) $1190.00