Question

Edward deposited $5000 into savings account 4 years ago. The simple interest rate is 4%. How much money did Edward earn in interest ? What would be his new account balance​

Answer 1

Interest — $800

Total — $5800

Explanation:

We know the question is asking for simple interest, so we can use its formula:

—> I = p · r · t (p = principal, r = rate, t = time)

Now that we know the formula, all we have to do is plug in the numbers:

—> I = (5000)(0.04)(4) Be careful not to use 4 for the rate

Now find the product...

—> I = 800

Now the $800 DOES NOT represent the total balance, it only represents the total interest made.

To find the balance, simply add the principal to the interest.

—> 800 + 5000 = 5800

Congrats, you found the answer!