Question

Kelsey deposited $3,600 in a bank account with annual interest rate 4.25%. How much interest was earned in 5 years?

Answer 1

$765

Explanation:

If an amount of money, P, called the principal, is invested for a period of t years at an annual interest rate r, the amount of interest, I, earned is given by

I =Prt where

I =interest

P =principal

r =rate

t =time

The following information is given.

Prt=$3,600=4.25%=5 years

Substituting the given information into the simple interest formula and solving for I gives

I =Prt

I =(3,600)(0.0425)(5)

=765

The amount of interest Kelsey earned in 5 years was $765.

Answer 2

• in 1year =4.25%
• in 5year=x
• then
• 1=4.25%
• 5=x then cross
• x=4.25%*5=21.25%