Question

How much simple interest would Jonathan earn on his savings account with a starting balance of

$1,500 over 4 years at 36% annual interest? Also, determine the balance after 4 years.
a):Identify the parameters
b)Total interest earned.
c)Balance in account.

Answer 1

Jonathan would earn $2,160 in simple interest over 4 years on his savings account with a starting balance of $1,500 at an annual interest rate of 36%. The balance after 4 years would be $3,660.

Step-by-step explanation:

When calculating simple interest, we use the formula:

I = PRT

Where I am the interest, P is the principal amount, R is the interest rate per year, and T is the time in years.

a) Identify the parameters:

• Principal (P): $1,500
• Rate (R): 36% or 0.36
• Time (T): 4 years

b) Total interest earned:

I = 1500 × 0.36 × 4

I = $2,160

c) Balance in account:

Total Balance = Principal + Interest

Total Balance = $1,500 + $2,160

Total Balance = $3,660