Question

1. Sergio deposits $3,100 into a bank account with an

annual simple interest rate of 2.6%.
a. How much interest does the account earn in 18 months?
b. What is the balance of the account after 18 months?

Answer 1

a) $120.90 b) $3220.90

Explanation:

Simple interest = prt/100

p = $3100

r = 2.6%

t = 18 months = 18/12

t = 1.5 years

Simple interest = 3100* 2.6 * 1.5 / 100

= $120.90

The account earns $120.90 in 18 months

b. Balance after 18 months = Initial deposit + Simple interest at 18 months

= 3100 + 120.9

= $3220.90