Question

Salma put $500 in a savings account that earns interest at a rate of 3% A. How much interest will Salma earn after 6 years? B. How much money will Salma have in the account after 6 years?

Answer 1

A. $90

B. $590

Step-by-step explanation

She put $500 in a savings account that earns 3% interest.

A. This is a simple interest question and for simple interest at a rate R and with a principal P (amount of money saved or deposited), after T years, the interest is given as:

`I\text{ = }\frac{P\cdot\text{ R }\cdot\text{ T}}{100}`

So, after 6 years, the interest is:

`\begin{gathered} I\text{ = }\frac{500\cdot\text{ 3 }\cdot\text{ 6}}{100} \\ I\text{ = \$90} \end{gathered}`

The interest after 6 years is $90.

B. The amount of money she will have after 6 years is the sum of the interest after 6 years and the amount of money initially deposited.

That is:

A = P + I

A = $(500 + 90)

A = $590

After 6 years, she will have $590 in the account.