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If #200,00.00 is saved at simple interest of 5% per annum, calculate the total amount after 4 years.

A. #220,000.00
B. #210,000.00
C. #220,800.00
D. #208,000.00

1 Answer

2 votes

Final answer:

The total amount after 4 years with a simple interest rate of 5% per annum is #240,000.00.

Step-by-step explanation:

To calculate the total amount after 4 years with a simple interest rate of 5% per annum, we can use the formula:

Total Amount = Principal + (Principal × Interest Rate × Time)

In this case, the principal is #200,00.00 and the time is 4 years. The interest rate is 5% per annum, which means it is applied annually. So, the calculation becomes:

Total Amount = #200,00.00 + (#200,00.00 × 0.05 × 4)

Simplifying the equation, we get:

Total Amount = #200,00.00 + #40,000.00 = #240,000.00

Therefore, the total amount after 4 years will be #240,000.00. None of the given options (A, B, C, or D) match this amount, so it seems there may be an error in the provided answer choices.

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