Question

William invested $800 in an account that paid 5% simple interest per year.

Part a how much interest did william earn over 3 years?
Part b William withdrew all of his money from the account after 3 years . if the bank charged him a 2% fee,how much money did William withdraw?

Answer 1

a) Interest = principal * rate * time

I = (800)(0.05)(3) = $120

b) $800 + $120 = $920 after the three years. $920 * (1 - 0.02) = $901.60.