Question

Albert is trying to save enough money to buy his uncle’s classic Thunderbird. Although he still has a long way to go, he now has $ 1,500 in a bank account that pays 6 1/2 % in yearly interest. How much will Albert have earned in interest one year from now?

Answer 1

Albert will earn $97.50 in interest one year from now.

Step-by-step explanation:

To calculate the amount of interest earned in one year, we will use the simple interest formula:

I = P * R * T

Where:

• I is the interest earned
• P is the principal amount (initial deposit)
• R is the interest rate (in decimal form)
• T is the time period (in years)

In this case, Albert has $1,500 in his bank account, while the interest rate is 6 1/2% (or 0.065 as a decimal) and the time period is 1 year.

Substituting these values into the formula, we have:

I = $1,500 * 0.065 * 1 = $97.50

Therefore, Albert will earn $97.50 in interest one year from now.