Question

1.Jim opens a savings account with $22,500. His account pays 3.5% simple interest. At the end of 5.5 years, Jim closes the account. How much interest does he earn? What is the total value of his account when he closes it?

Answer 1

The interest I given principal P, rate R time T is given by:

`I=(PRT)/(100)`

Substitute P = 22500, R = 3.5, and T=5.5 into the formula:

`I=(22500*3.5*5.5)/(100)=4331.25`

Therefore, the interest is $4331.25.

The closing account balance is given by:

`P+I=22500+4331.25=26831.25`

The required interest is $4331.25 and the value of the account when he closed it is 26831.25