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18 votes
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This problem is attempting to TRICK you.

Nevada deposits $4000 in a savings account for 18 months.



The bank is paying 5% interest per year.

How much Interest will Nevada earn from the bank?



What will be the total balance in Nevada’s account after 18 months?

User Patridge
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1 Answer

15 votes
15 votes

Answer:

nevada will earn $300 interest and the total balance after 18 months is $4,300.

Explanation:

we use this following formula to find how much interest nevada has :

simple interest = principal * interest rate * time

since the amount of time is in months, we have to convert it into years. we use interest in years ONLY.

1 year = 12 months

1.5 years = 18 months

now that we have the correct values to use this formula in, we now substitute the numbers in.

simple interest = principal * interest rate * time

simple interest = $4,000 * 0.05 * 1.5

here, we converted the percentage rate into a decimal because obviously, you cannot directly multiply percentages by money or normal numbers.

simple interest = principal * interest rate * time

simple interest = $4,000 * 0.05 * 1.5

simple interest = $200 * 1.5 (we multiplied the first two values first so it's easier to get the final answer)

simple interest = $300

we now have to find the total balance on nevada's account after 18 months by using the following formula :

total amount = principal + simple interest

since we know the amount of principal and interest already, all we have to do is substitute the numbers in.

total amount = principal + simple interest

total amount = $4,000 + $300

total amount = $4,300

therefore, nevada's total balance on her account after 18 months is $4,300.

User Mentor Reka
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