Question

Owen has $21 in a savings account. The interest rate is 5% per year and is not compounded. How much will he have in 4 years? Use formula i=p*r*t, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

Answer 1

Given Data:

The initial investment is: p=$21

The simple intrest rate is: r=5%

The total time piriod is: t=4 years.

The expression to calculate the intrest in t years is,

`\begin{gathered} i=P*(r)/(100)* t \\ i=21*(5)/(100)*4 \\ i=20*(1)/(20) \\ i=1 \end{gathered}`

Thus, the total intrest after 4 years is $1.

The expression to calculate the final balance after 4 years is,

`\begin{gathered} FINAL\text{ BALANCE= P+i} \\ =21+1 \\ =22 \end{gathered}`

Thus, the final balance after 4 years will be $22.