Question

1. Mr. Davis deposited $1,250 into an account. He made no additional deposits or withdrawals. Mr. Davis earned 4.25% annual simple interest on the money in the account. What was the balance in dollars and cents in Mr. Davis’ account at the end of 4 years? (Use your STAAR chart to find formula)

Answer 1

At the end of 4 years, Mr Davis will have $1462.50 in his account

Explanation:

Simple Interest SI = (Principal P × Rate R × Time T)/100

SI = (P × R × T)/100

P = $1250, R = 4.25%, T = 4 years

SI = ($1250 × 4.25 × 4)/100

SI = (21250)/100

SI = $212.50

The balance will therefore be

$1250 + $212.50 = $1462.50