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Suppose you deposit $200 in a savings account that earns 4% per year. Find the simple interest earned in 2 years. Then find the total of principal plus interest.

User Kiaurutis
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Answer:

  • interest: $16
  • account total: $216

Explanation:

The amount of interest is given by the simple interest formula:

I = Prt . . . . where P is the amount earning interest, r is the annual rate, t is the number of years

I = $200·0.04·2 = $16.00

The simple interest earned in 2 years is $16.00.

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The total of principal and interest is found by adding those values:

$200.00 +16.00 = $216.00

The total amount is $216.00.

User Robin De Schepper
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