Question

ACCOUNTS Orenda opened a savings account with $4500 that earns 0.6% simple interest annually. After how many years will the balance of the account be $4635? Round to the nearest tenth, if necessary.

Answer 1

5 years

Explanation:

A = $4,635.00

I = A - P = $135.00

Equation:

A = P(1 + rt)

Calculation:

First, converting R percent to r a decimal

r = R/100 = 0.6%/100 = 0.006 per year.

Solving our equation:

A = 4500(1 + (0.006 × 5)) = 4635

A = $4,635.00

The total amount accrued, principal plus interest, from simple interest on a principal of $4,500.00 at a rate of 0.6% per year for 5 years is $4,635.00.