Final answer:
To calculate the final balance after 1 year, use the simple interest formula: Final Balance = Principal × (1 + Interest Rate × Time). Use the given variables in the formula to find the answer.
Step-by-step explanation:
In order to calculate the final balance after 1 year, you can use the formula for simple interest:
Final Balance = Principal × (1 + Interest Rate × Time)
Where:
- Principal is the initial amount of money
- Interest Rate is the rate at which interest is applied
- Time is the number of years
For example, if you have a principal amount of $5000 and an interest rate of 4%, the formula would be:
Final Balance = $5000 × (1 + 0.04 × 1) = $5200