Question

Clara has $75,266 in a savings account. The interest rate is 14% per year and is not compounded. To the nearest Dollar, how much interest will she earn in 4 years? use the formula I equals PRT, where I is the interest earned, p is the principal, R is the interest rate expressed as a decimal and T the time in years round your answer to the nearest dollar

Answer 1

Simple Interest formula:

`i=\text{Prt}`

Where

i is the interest earned

P is the initial amount

r is the rate of interest per year, in decimal

t is the time in years

Given, in the problem,

P = 75,266

r = 14% = 0.14

t = 4 yrs

We find the interest amount earned in 4 years to be:

`i=75266\cdot0.14\cdot4=42148.96`

So, total amount of money in the account at the end of 4 years is initial PLUS the interest earned.

75266 + 42148.96 = $117414.96

Answer:$117,414.96