The account balance in the account $86.25 after 3 years by using simple interest.
What is the simple interest?
Simple interest is a quick and simple formula for figuring out how much interest will be charged on a loan. The daily interest rate, the principle, and the number of days between payments are multiplied to calculate simple interest.
The formula of the simple interest is I = PRt.
P = Principal
R = Rate of interest per year
t = time
In the given question Principal = $75, R = 5% = 0.05, t = 3 years.
I = 75 × 0.05 × 3 = 11.25
The account balance after 3 years will be sum of principal and interest.
The account balance after 3 years is = $(75 + 11.25) = $ 86.25.
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