Question

An account earns simple interest. (a) Find the interest earned. (b) Find the

Answer 1

Answer:

#a. $80

#b. $1680

Step-by-step explanation:

We are given;

• Amount invested (principal) is $1600
• Rate of interest is 5%
• Time = 1 year

We are required to determine the amount of simple interest earned and the amount or balance in the account after 1 year.

#a. Interest earned

To calculate simple interest we use the formula;

I = (PRT) ÷ 100

Where, P is the principal, R is the rate, T is the time and I is the simple interest.

Therefore;

I = (1600 × 5 × 1) ÷ 100

 = $80

Therefore, simple interest earned is $80

#b. Balance of the account (Amount accrued)

We are going to use the formula;

A = P + I , where A is the amount accrued, P is the principal and I is the simple interest earned.

Therefore;

Account balance = $1600 + $80

                            = $1680

Thus, the account balance after 1 year will be $1680