Question

Alex deposited $8,400 into an account with 7.25% interest per year. Using simple interest estimate how much is in the account after 5 years?

Answer 1

To estimate the amount in the account after 5 years using simple interest, use the formula: Simple Interest = Principal x Rate x Time. Substitute the values and calculate the total amount by adding the principal and the simple interest.

Step-by-step explanation:

To estimate the amount in the account after 5 years using simple interest, we can use the formula:

Simple Interest = Principal x Rate x Time

Here, the principal is $8,400 and the rate is 7.25% (or 0.0725 as a decimal). The time is 5 years. Substituting these values into the formula:

Simple Interest = $8,400 x 0.0725 x 5 = $3,045

The total amount in the account after 5 years would be the principal plus the simple interest:

Total = Principal + Simple Interest = $8,400 + $3,045 = $11,445