Question

An account earns simple annual interest. You deposit $600 into an account at 5% interest rate for 2 years. (a) Find the interest earned. (b) Find the balance of the account. *

Answer 1

Answer:

(a) $60 | (b) $660

Step-by-step explanation:

We can use the simple interest formula for this:

$I=Prt$

I = interest amount

P = principal amount

r = interest rate (decimal form)

t = time (years)

First, change 5% into its decimal form:

5% -> $\frac{5}{100}$ -> 0.05

Next, plug in the values into the equation:

$I=600(0.05)(2)$

$I=60$

The interest earned is $60. To find the total balance, just add the $600 back.

$600+60=660$

The total interest earned is $60 and the total is $660.