Question

Kimberly Young deposited $3,500 today in an account paying 6 percent interest annually. (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.)

What would be the simple interest earned on this investment in 5 years?

Answer 1

The simple interest earned on Kimberly's deposit of $3,500 at 6% annual interest over 5 years is calculated to be $1,050 using the formula Simple Interest = Principal × Rate × Time.

Step-by-step explanation:

To calculate the simple interest earned on Kimberly Young's deposit of $3,500 at an annual interest rate of 6% for 5 years, we use the formula Simple Interest = Principal × Rate × Time, where Principal is the initial amount of money deposited, Rate is the annual interest rate as a decimal, and Time is the number of years the money is invested.

First, convert the annual interest rate from a percentage to a decimal by dividing by 100:

6% / 100 = 0.06

Next, substitute the values into the formula:

Simple Interest = $3,500 × 0.06 × 5

Calculating this, we get:

Simple Interest = $3,500 × 0.06 × 5 = $1,050

Therefore, the simple interest Kimberly would earn on her investment in 5 years is $1,050.