Question

An account pays 7% per year simple interest. In year 1, the amount in the account is $950. How much is in the account in year 6?

Answer 1

There are 5  more payments of interest 
= 5 * 0.07 * 950 = 332.5
so amount in the account after 6 years = 950 + 332.5 = 1282.5

Answer 2

Answer:

$1282.5      

Step-by-step explanation:

Given : Rate of interest = 7% = 0.07

          The amount in the account is $950 in first year.

To Find : Amount  in the account in year 6

Solution :

Since we need to calculate for sixth year and we are given the amount of first year . So, to calculate simple interest for sixth year we use time = 5 years

First we need to calculate the amount of interest for 5 years

Formula of simple interest :  Principal * Rate * Interest

⇒$S.I. = 950*0.07*5$

⇒$S.I. = 332.5$

Thus, The simple interest for 5 years is $332.5

Now, amount in the account in year 1  is $ 950 . After the addition of interest for 5 years the amount in sixth year will be :

⇒ $ 950 +$332.5

⇒$1282.5.

Thus, the amount in sixth year will be $1282.5