Question

Brian has $20,000 in a savings account that earns 5% annually. The interest is not

compounded. How much will he have in total in 5 years?

Answer 1

Since the interest is not compounded, Brian will earn a simple interest of 5% per year on his initial deposit of $20,000. The formula for calculating simple interest is:

I = P * r * t

where I is the interest earned, P is the principal (initial deposit), r is the annual interest rate as a decimal, and t is the time in years.

Substituting the given values, we get:

I = 20,000 * 0.05 * 5 = 5,000

Therefore, Brian will earn $5,000 in interest over the 5-year period. Adding this to his initial deposit of $20,000, we get:

Total amount = $20,000 + $5,000 = $25,000

Therefore, Brian will have a total of $25,000 in his savings account after 5 years.

Answer 2

$25,000

Explanation:

The total amount Brian will have in 5 years can also be calculated using the formula for simple interest:

A = P(1 + rt)

where:

A = the total amount

P = the principal (initial balance)

r = the annual interest rate

t = the time period (in years)

In this case:

P = $20,000

r = 0.05 (since 5% is the annual interest rate)

t = 5 (since we're calculating the total amount after 5 years)

Plugging these values into the formula, we get:

A = $20,000(1 + 0.05 x 5)

A = $20,000(1.25)

A = $25,000

So we get answer of $25,000, which is the total amount Brian will have in 5 years.