Question

Lanny goes to the bank and puts $4000 in a savings account. He earns a simple interest of 2.5%. If he leaves the money in the account for five years, what is the total amount in the account after the five years.

Answer 1

Answer:

$4500

Step-by-step explanation:

The simple interest formula is

$A=P(1+rt)$

Where $A$ is the final amount, $P$ is the principal, $r$ is the rate of interest and $t$ is the time periods.

Replacing all given values, we have

$A=P(1+rt)\\A=4000(1+0.025(5))=4500$

Therefore, after 5 years, Lanny would have $4500 with a simple interest of 2.5%.

Answer 2

I think it may be approximately 4,525.63