Question

Starting with $7,500 in your account, how much money will you have saved in 5 years in a simple interest account with a rate of 4.65%. What is the total amount of interest earned at the end of 5 years (account balance - $7,500)

Answer 1

1. Balance in account after 5 years = $9,243.75
2. Interest earned at end of 5 years = $1,743.75

Explanation:

The total amount saved in a simple interest account at the end of 5 years is given by;

= Principal (1 + Interest rate * time )

= 7,500 ( 1 + 4.65% * 5)

= $9,243.75‬

Total Interest earned;

= 9,243.75‬ - 7,500

= $‭1,743.75‬