Graduation gift of $5,000 image that you are able to average 2.5% interest on the principal. 1. How much (simple) interest will you receive on your savings after one year?

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asked Nov 10, 2023 25.6k views

4 votes

Graduation gift of $5,000 image that you are able to average 2.5% interest on the principal.

1. How much (simple) interest will you receive on your savings after one year?

Mathematics
college

Wariored asked

by Wariored

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1 Answer

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$~~~~~~ \textit{Simple Interest Earned} \\\\ I = Prt\qquad \begin{cases} I=\textit{interest earned}\\ P=\textit{original amount deposited}\dotfill & \$5000\\ r=rate\to 2.5\%\to (2.5)/(100)\dotfill &0.025\\ t=years\dotfill &1 \end{cases} \\\\\\ I = (5000)(0.025)(1) \implies I = 125$