Question

10 Sandra deposited $2,500 into a simple interest account. She earned $75 in interest after 1 year. Ron deposited $8.000 into an account that has the same interest rate as Sandra's account. How much money did Ron earn in interest after 1 year?

Answer 1

We have the next formula for simple interest

`A=P(1+rt)`

where

A= amount

P= the principal

r=rate

t=time

for Sandra

A=2575

P=2500

t=1

`2575=2500(1+r)`

we need to calculate the rate so we need to clear r

`r=(2575-2500)/(2500)=(75)/(2500)=0.03`

the rate is 3%

for Ron

`\begin{gathered} A=8000(1+0.03)=8240 \\ \end{gathered}`

Ron earn $240