Question

Dave puts $200 in a savings account earning 2.5% annual simple interest. Assume Dave makes no other deposits or withdrawals on the account. How much interest does Dave earn on the account after 5 years? In how many years will the account have $255?
​After 5 years, the interest earned on the account will be $_____?
​The account will have $255 after_____ years?

Answer 1

After 5 years , the interest earned on the account will be 25$

The account will have 255$ after 11 years

Step-by-step explanation:

Details are given in the question-

Principal= 200$

Rate of Interest= 2.5% annual (Simple Interest)

Interest Dave earns after 5 years

We know that Simple Interest (SI)= (Principal*Rate*Time)/100  ... Equation 1

Substituting the values, we get

SI= 200*2.5*5/100= 2*2.5*5

Interest earned by Dave after 5 years = 25$  

The period in which the principal would amount to 255$

We know that SI=Amount- Principal

SI=255$-200$= 55$

From Equation 1     SI=P*R*T/100

Thus T= SI*100/(P*R)

Putting the values, we get  

T= 55*100/(200*2.5)

T=11 years

Thus, Amount of 200$ would amount to 255$ in 11 years at an interest rate of 2.5% annually