Question

Item 2 An account earns simple interest. $1500 at 4% for 5 years a. Find the interest earned. b. Find the balance of the account.

Answer 1

The account is starting off with 1500, so that will be the start value. Since it is simple interest, it will always be gaining 4 percent of 1500. Let's find 4 percent of 1500.
1500×.04= 60
The account will be growing by $60 every year.
1500+60x=y
X is the number of years. We can find the interest earned by multiplying 5, since that is the number of years we are trying to find, and 60, since that is the interest.
60×5= 300
The interest earned is $300 over 5 years.
Now let's find the balance of the account after 5 years.
1500+ 60(5)=y
1500+300=y
1800=y
The balance of the account will be $1,800 after 5 years.