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
