Question

max has a savings account that earns 5 simple interest each year. the account has 1,500. if max dose not add or take out any money. how much interest will he earn in 3 years

Answer 1

Max will earn $225 in simple interest over 3 years on his $1,500 savings account with an annual interest rate of 5%. The total amount in his account after this period will be $1,725.

Step-by-step explanation:

The question asks how much simple interest Max will earn after 3 years on a savings account with a principal amount of $1,500 and an interest rate of 5% each year.

Step-by-Step Calculation:

1. First, understand that the formula for simple interest is I = P × R × T, where I is the interest, P is the principal amount, R is the interest rate (as a decimal), and T is time (in years).
2. For Max's account, the principal (P) is $1,500, the interest rate (R) is 0.05 (5% converted to decimal form), and the time (T) is 3 years.
3. Using the formula, calculate the interest: I = $1,500 × 0.05 × 3 = $225.

Therefore, the total simple interest Max will earn over 3 years is $225.

Total Interest and Future Amount

The total amount in Max's savings account after 3 years, including the principal and the interest, will be future amount = principal + interest = $1,500 + $225 = $1,725.