Question

Julio invest $15,000 in a savings account that pays 1.5% simple interest. How much will be in the

account after 5 years if Julio makes no withdrawals or deposits? *

Answer 1

Answer: Final amount

Explanation:

Final amount = Simple interest + Principal

=Principal x Rate x Time + Principal

= Principal (Rate x Time +1) [Simple interest =Principal x Rate x Time]

Given: Principal = $15,000, Rate = 1.5% = 0.015 [To conver % into decimal we divide it by 100]

Time = 5 years

Final amount = $(15000(0.015 ×5+1))

=$ (15000×1.075)

=$ 16125

Hence, there will be $16,125 in the account after 5 years if Julio makes no withdrawals or deposit.