Question

6. AJ deposited $900 into an account that earns 4% simple interest. He wants to leave the

money there for 25 years. Assuming no other deposits or withdrawals are made, find
the following:

Interest Earned:

Total value of the Account:

Answer 1

Interest Earned: $360

Total value of the Account: $1260

Explanation:

To find the interest earned, we can use the formula:

Interest = Principal x Rate x Time

where the principal is the amount deposited, the rate is the interest rate expressed as a decimal, and the time is the number of years the money is left in the account.

In this case, the principal is $900, the rate is 0.04 (since 4% is equivalent to 0.04 as a decimal), and the time is 25 years. Plugging in these values, we get:

Interest = $900 x 0.04 x 25 = $900 x 1 = $360

So the interest earned over 25 years is $360.

To find the total value of the account, we can add the interest earned to the original deposit:

Total Value = Principal + Interest

Total Value = $900 + $360 = $1260

So the total value of the account after 25 years is $1260.

Hope this helps!