Question

How much interest will Hannah earn in four years if she deposit $630 in a savings account at 6.5% simple interest?

Answer 1

$93.60

Explanation:

Simple interest shows the amount of money an account earns based on the initial deposit.

Interest Formula

The formula to find the amount of interest earned is I = Prt. In this equation, I is the total interest earned, P is the principal or the initial deposit, r is the interest rate as a decimal, and t is the time in years.

To find the total balance of the account just add the interest amount to the principal. So, A = I + P, where A is the total balance.

Solving for Simple Interest

For this question, the variables are:

• P = 630
• r = 0.065
• t = 4

Now, we can plug these values into our formula.

• I = 360 * 0.065 * 4
• I = 93.6

After 4 years, the account will earn $93.60 in simple interest.