Question

Mr. Berry had $120,000 in a retirement account. The account paid 4.25% simple interest. How much money was in the account at the end of 10 years?

Answer 1

So Mr. Berry had $120,000 in a retirement account and it paid 4.25% simple interest. To find out how much money was in the account at the end of 10 years, we need to calculate the interest.

To calculate the interest, we use the formula:

principal x interest rate x time (in years)

So for Mr. Berry's account:

$120,000 x 4.25% x 10 = $51,000

That means the interest earned over 10 years is $51,000. To find the total amount in the account at the end of 10 years, we add the interest to the original amount:

$120,000 + $51,000 = $171,000

So at the end of 10 years, Mr. Berry's account had $171,000.