Question

You deposit $200 in a savings account. The account earns 6% simple interest per year.

A. What is the interest earned after 2 years.
B. What is the balance after 2 years.

Answer 1

A. $24

B. $224

Explanation:

For simple interest, the formula is I = PRT where I = interest earned, P = principal amount borrowed/deposited, R = rate as a decimal, and T = time in years.

I = (200)(0.06)(2)

I = 24

Then add that to the amount deposited ($200) and you're done.

200 + 24 = $224

Please let me know if you have questions.

Answer 2

200 x 1.06^2
=224.72