if you deposit $3,500 in a savings account that offers a 7% interest rate per year, after 6 years you will earn $1470 in interest. This means that your total balance after 6 years will be the original $3,500 plus the $1470 in interest, which amounts to $5000.
To determine the simple interest, we can use the formula:
Simple Interest = (Principal Amount) x (Rate of Interest) x (Time)
Given:
Principal Amount = $3,500
Rate of Interest = 7% per annum
Time = 6 years
Plugging the values into the formula:
Simple Interest = (3500) x (0.07) x (6)
Calculating the simple interest:
Simple Interest = $1470
Therefore, the simple interest on a principal amount of $3,500, at an annual interest rate of 7% for a period of 6 years, is $1470.
It's important to note that simple interest is calculated based on the original principal amount and does not take compounding into account.