Question

You have an account with a principal of $200. it pays 8% at the end of every year. calculate the principal at the end of 3 years.

Answer 1

Simple interest is a method of calculating interest on an amount for n period of time with a rate of interest of r. The principal at the end of 3 years is $248.

What is simple interest?

Simple interest is a method of calculating interest on an amount for n period of time with a rate of interest of r. It is calculated with the help of the formula,

SI = (P × R × T)/100

where SI is the simple interest, P is the principal amount, R is the rate of interest, and T is the time period.

The principal at the end of 3 years is,

Principal after 3 years = P + (P × R × T)

= $200 + ($200 × 0.08 × 3)

= $200 + $48

= $248

Hence, the principal at the end of 3 years is $248.

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