Question

Answer the following questions10. How much interest will be earned in 3 years from $730placed in a savings account at 6.5% simple interest?

Answer 1

Compound Interest Formula

`A=P*(1+rt)`

where A is the accrued amount, P is the principal amount, r the rate, and t the time.

From our problem we can get:

• P = $730

,

• r = 6.5% = 0.065

,

• t = 3

Replacing them in the formula:

`A=730*(1+(0.065)*(3))`

Simplifying:

`A=730*(1+0.195)`
`A=730*(1.195)`
`A=872.35`

Answer: $872.35