Question

Roberto's parents open a savings account for him by depositing $250 on his birthday. The account earns simple interest at an annual rate of 5%. How much will be in Roberto's account after 5 years

Answer 1

To calculate the amount of money in Roberto's savings account after 5 years, you can use the formula for simple interest:

I = Prt

Where:

I = Interest earned

P = Principal (original amount of money in the account)

r = Annual interest rate (expressed as a decimal)

t = Number of years

In this case, the principal is $250, the annual interest rate is 5% (or 0.05 as a decimal), and the number of years is 5.

So, you can plug these values into the formula:

I = 250 * 0.05 * 5

To find out the total amount of money in the account after 5 years, you need to add the interest to the principal:

250 + I = 250 + (250 * 0.05 * 5) = 250 + 62.5 = $312.5

Roberto's account will have $312.5 after 5 years.