Question

Arisia puts $500.00 into a savings account with an annual simple interest rate of 4.5%

If the interest rate stayed the same, how much interest would Arisia’s account earn after 15 years?

Answer 1

Simple interest is calculated by multiplying the principal amount (the initial deposit) by the interest rate and the number of years.

The formula for simple interest is:

I = P * r * t

Where:

I = Interest

P = Principal (initial deposit)

r = Interest rate (expressed as a decimal)

t = Time (in years)

In this case, the principal amount is $500.00, the interest rate is 4.5% (converted to 0.045), and the time is 15 years.

We can plug in the values into the formula:

I = $500.00 * 0.045 * 15 = $337.50

So, after 15 years with the same interest rate, Arisia’s account would earn $337.50 in interest.