Question

Richie Rich deposited $5,250 into an account. He made no additional deposits or withdrawals. Richie Rich earned 3.5% annual simple interest on the money in the account. What was the balance in dollars and cents in Richie Rich's account at the end of 5 years?

Answer 1

To calculate the balance on the account after 5 years you have to calculate the simple interest using the formula:

`A=P(1-rt)`

A= total accured amount

P= principal amount

r= interest rate expressed in decimals

t=time

For

P=$5250

r=0.035

t=5years

The balance on the account will be:

`\begin{gathered} A=5250(1+0.035\cdot5) \\ A=6168.75 \end{gathered}`

At the end of the 5 years there will be $6168.75