Question

Deon invests $15,000 in a savings account that pays 3% simple interest. How much will be in the account after 4 years if Deon makes no withdrawals or deposits to the account?

Answer 1

$16,800

Explanation:

The amount that would be in the account = amount deposited + interest earned on deposit

interest earned on deposit can be determined by determining the simple interest

Simple interest = principal x time x interest rate

principal = the amount deposited = $15,000

Time = the duration of the deposit = 4 years

interest rate = the percentage on deposit that would be earned = 3%

15,000 x 0.03 x 4 = $1,800

The amount that would be in the account = $15,000 + $1800 = $16,800