Question

Interest Rate: 7% each year

Starting Balance: $194
Time Passed: 13 years
A.) How much interest has accrued if we are using simple interest?
B.) What is the new total balance?

Answer 1

$194 (starting balance) / 100 (100%) = $1.94 (1%)

$1.94 * 7 = $13.58 (7%)

$13.58 * 13 (13 years) = $176.54 (Answer A)

$194 (starting balance) + $176.54 (interest) = $370.54 (Answer B)

Answer 2

$370.54

Explanation:

194*7/100=13.58

194+13.58*7/100=14.53

207.58+14.53*7/100

.....

or

7*13/100=0.91

194*0.91=176.54

Total Interest = 176.54

New Balance = 176.54+194=370.54