Question

Hakim is saving money to buy a computer. Hakim invests $800 in a bank that pays 5% simple interest annually. How much money does he have after 1 full year in total? Show your work, or explain how you found your answer.

Answer 1

Hakim will have $840 after one year. The simple interest earned on his $800 investment at a 5% annual rate is $40, which is added to the principal to get the total amount.

Step-by-step explanation:

Hakim's investment problem can be solved using the simple interest formula. The formula to calculate simple interest is I = Prt, where I stands for interest, P for principal amount (the initial amount of money), r for the annual interest rate (in decimal form), and t for time in years.

Let's apply this formula to Hakim's situation:

• Principal amount (P) = $800
• Annual interest rate (r) = 5% = 0.05 (as a decimal)
• Time (t) = 1 year

Now, calculate the interest:

I = $800 × 0.05 × 1 = $40

After one year, the total amount Hakim has including the interest will be the sum of the principal amount and the interest earned:

Total Amount = Principal Amount + Interest

Total Amount = $800 + $40 = $840

Therefore, after one full year, Hakim will have $840 in total.