Question

You invest $1000 in an account at 2.5% per year simple interest. How much will you have in the account after 3 years? Round to the nearest whole dollar. A: $3250 B: $1075 C: $1088 D: $1163

Answer 1

The amount in the account after 3 years is $1075 .

Option (B) is correct.

Explanation:

Formula

`Simple\ interest = (Principle* rate* time)/(100)`

As given

You invest $1000 in an account at 2.5% per year simple interest.

Principle = $1000

rate = 2.5 %

Time = 3 years

Put in the formula

`Simple\ interest = (1000* 2.5* 3)/(100)`

`Simple\ interest = (7500)/(100)`

Simple interest = $75

Amount in the account = Principle + simple interest

= $1000 + $75

= $1075

Therefore the amount in the account after 3 years is $1075 .

Option (B) is correct.

Answer 2

Interest = Principle * rate * time
I = PRT

P = 1000
R = 2.5% -- change to a decimal = .025
T = 3

now we sub I = PRT
I = (1000)(.025)(3)
I = 75
so at the end of 3 years, there will be : 1000 + 75 = $ 1075 in the account