Question

i invest $250 in a simple account that earns 10% annually. After 6 years, how much money have i earned? Hint round to the nearest cent.

Answer 1

We have to use the simple interest formula

`A=P(1+rt)`

Where P = 250; r = 0.10 (10%); t = 6. Replacing these values, we have

`A=250(1+0.10\cdot6)=250(1+0.6)=250(1.6)=400`

Hence, after 6 years, you have $400.

If we subtract this amount from the investment, we get the profits.

`400-250=150`

Hence, the earnings are $150.