Question

How much would be in an account when you turned 18 if, on the day you were born, $1,000 were deposited into the account which returned 6% simple interest, and no other deposits or withdrawals were made?

Answer 1

PROBLEM

Simple Interest

Method

Step 1

write out parameters

Principal P = $1,000

Rate R = 6%

Time T = 18 years

Interest = I

Step 2

write out the simple interest formula

`\begin{gathered} I\text{ = }\frac{P\text{ X R X T}}{100} \\ \end{gathered}`

Step 3

substitute values in the formular

`\begin{gathered} I\text{ = }\frac{1000\text{ x 6 x 18}}{100} \\ I\text{ = }(108000)/(100) \\ I\text{ = \$1080} \end{gathered}`

Amount in the account = Principal + Interest

= $1000 + $1080

= $2080