Question

Use the simple interest formula to find the ending balance 5000 at 5% for 3.5 years

Answer 1

Answer:

Given:  Principal(P) = $ 5000 , T = 3.5 years and R = 5%.

Using the formula of Simple Interest (I) given by;

$I = \frac{P\times R \times T}{100}$ .......[1] , where P is the Principal amount of money to be invested, R be the rate of interest and T be the time.

Substitute the given values of P ,  R and T in [1] we have;

$I = \frac{P \times R \times T}{100} = \frac{5000\times 5 \times 3.5}{100}$

$I = 50 \times 5 \times 3.5 = 250 \times 3.5$

Simplify:

$I = \ 175$

An Ending balance is calculated by subtracting cash outflows, interest paid for financing and principal paid on financing.

Ending Balance = $ 5000 + $ 175 = $ 5,175.

Therefore, the ending balance is $ 5,175