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Suppose that you invest $4200 in an account that carns simple interest at an annual rate of 5.2%. Determine the accumulated balance after 5 years.

(a) $218.40
(b) $5292.00
(c) $5411.62
(d) $1092.00

User Derik
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Final answer:

To find the accumulated balance of a $4200 investment at 5.2% simple interest over 5 years, you calculate the interest ($1092.00) and add it to the principal, resulting in a total balance of $5292.00.

Step-by-step explanation:

The subject of this question is determining the accumulated balance after 5 years when $4200 is invested in an account that earns simple interest at an annual rate of 5.2%. To calculate the total amount accumulated, we can use the formula for simple interest which is Interest = Principal × Rate × Time. For this example, the principal is $4200, the rate is 5.2% (or 0.052 as a decimal), and the time is 5 years.

Let's calculate the interest earned:
Interest = $4200 × 0.052 × 5 = $1092.00.

Next, we add the interest earned to the original principal to find the total accumulated balance:
Total balance = Principal + Interest
Total balance = $4200 + $1092.00 = $5292.00.

Therefore, the correct answer is (b) $5292.00, which represents the total accumulated balance after 5 years including simple interest.

User Dimitar Tsonev
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