Question

Theodore opens a savings account with a deposit of 2500. The savings account earns 3.6% simple interest each year. If Theodore makes no additional deposits or withdrawals, which two statements about his account balance are true ?

Answer 1

after 1 year , the balance of Theodoro's account

After 3 years the balance a

Step-by-step explanation

Simple interest is a quick and easy method of calculating the interest charge on a loan. Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.

`I=p\cdot r\cdot t`

where I is the interes monye created,P is the starting amount of money and t is the time

then,

Let

after one year

t=1

r=3.6%=0.036

P=2500

Now, replace

`\begin{gathered} I=p\cdot r\cdot t \\ I=2500\cdot0.036\cdot1 \\ I=90 \end{gathered}`

so, after 1 year he has 90 of interest, so the total is

`\begin{gathered} for\text{year}1=2500+90=2590 \\ \end{gathered}`

so

after 1 year , the balance of Theodoro's account

Step 2

for year 2

let t= 2

replace

`\begin{gathered} I=p\cdot r\cdot t \\ I=2500\cdot0.036\cdot2 \\ I=180 \end{gathered}`

so, for year 2, the total is

`\begin{gathered} \text{for year 2} \\ \text{account balance=2500+180} \\ \text{account balance=2680} \end{gathered}`

and so on

Now, for year 3

`\begin{gathered} \text{for year 3} \\ let\text{ t=3} \\ I=p\cdot r\cdot t \\ I=2500\cdot0.036\cdot3 \\ I=270 \end{gathered}`

so, for year 3

`\text{account balance=2500+270=2770}`