Question

Mrs. Lockwood invests $2,900 in a savings account that pays 4.25% simple interest per year. If she does not add or withdraw money from the account, how much interest will she earn after 6 years? Round to the nearest cent. $

Answer 1

Mrs. Lockwood will earn $739.25 in simple interest from her $2,900 investment at a 4.25% interest rate after 6 years.

Step-by-step explanation:

Mrs. Lockwood's investment and the calculated simple interest it accrues is a standard problem in financial mathematics. To calculate the simple interest earned after 6 years, we use the formula Interest = Principal × Rate × Time, where the principal is $2,900, the rate is 4.25% (expressed as a decimal, 0.0425), and the time is 6 years.

To calculate the interest earned after 6 years, we can use the formula:

Interest = Principal x Rate x Time

Where: Principal = $2,900 (the initial investment)

Rate = 4.25% (convert to decimal by dividing by 100 = 0.0425)

Time = 6 years

Plugging the values into the formula:

Interest = $2,900 x 0.0425 x 6 = $739.50

Therefore, Mrs. Lockwood will earn approximately $739.50 in interest after 6 years.