Question

Meg has $8650 in a savings account to buy a car. the account pays 4.5% simple interest. how much interest will she have after 5 years?

Answer 1

Meg will earn $1946.25 in simple interest after 5 years by applying the formula I = PRT, where P is $8650, R is 4.5% (0.045), and T is 5 years.

Step-by-step explanation:

To calculate the amount of simple interest Meg will earn after 5 years, we can use the formula for simple interest, which is:

I = PRT

where:

• I represents the interest,
• P represents the principal amount (initial amount of money),
• R is the interest rate (expressed as a decimal), and
• T is the time in years.

In Meg's case, the principal amount P is $8650, the interest rate R is 4.5% (or 0.045 when expressed as a decimal), and the time T is 5 years. Substituting these values into the simple interest formula gives us:

I = 8650 * 0.045 * 5

Performing the calculation:

I = $1946.25

Therefore, Meg will have earned $1946.25 in simple interest after 5 years.