Question

Deon deposits $3000 into an account that pays simple interest at an annual rate of 2%. He does not make any more deposits. He makes no withdrawals until

the end of 4 years when he withdraws all the money.
Answer the following questions. If necessary, refer to the list of financial formulas.
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(a) How much total interest will Deon earn?
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(b) What will the total amount in the account be (including interest)?
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Answer 1

Deon will earn a total interest of $240 and the total amount in the account will be $3240.

Step-by-step explanation:

To calculate the total interest earned by Deon, we can use the formula for simple interest: Interest = Principal * Rate * Time. In this case, the principal is $3000, the rate is 2%, and the time is 4 years. Therefore, the total interest earned is:

Interest = $3000 * 0.02 * 4 = $240

To calculate the total amount in the account (including interest), we can use the formula: Total Amount = Principal + Interest. In this case, the principal is $3000 and the interest is $240. Therefore, the total amount in the account is:

Total Amount = $3000 + $240 = $3240