Question

Gerry deposited $1,230 in an account that pays 2.19% simple interest for one year.

a. How much interest will he earn in one year?
$
b. What will his balance be after one year?
$

Answer 1

Answer: See explanation

Explanation:

a. Simple interest is calculated using the formula: PRT/100

where P = principal = $1230

R = rate = 2.19%

T = time = 1 year

We then slot the values into the formula

= PRT/100

= (1230 × 2.19 × 1)/100

= 2693.7/100

= $26.937

b. Balance = Principal + Interest

= $1230 + $26.937

= $1256.937