Question

Joshua put $12,000 in a savings account that pays 2.25% simple interest. How much interest will the savings account earn after 5 years?

Answer 1

Joshua's $12,000 savings account will earn $1,350 in simple interest after 5 years at a 2.25% interest rate, calculated using the formula I = P x r x t.

Step-by-step explanation:

To calculate the amount of simple interest that Joshua will earn on his $12,000 savings account after 5 years at a 2.25% interest rate, we can use the simple interest formula:

I = P × r × t

Where:

• I is the interest
• P is the principal amount ($12,000)
• r is the annual interest rate (2.25% or 0.0225)
• t is the time in years (5)

Using these values, we calculate the interest as follows:

I = $12,000 × 0.0225 × 5

I = $1,350

So, after 5 years, Joshua's savings account will earn $1,350 in simple interest.