Question

Amy opened a savings account with $1750 she received for graduation. The account pays 4.3% simple interest. What is the balance after 6 months?

Answer 1

Given:

• The principal amount that Amy opened her savings account with is $1750.
• The rate of simple interest compounded annually is 4.3%.
• The time period for which we calculate the new balance is 6 months.

To Find:

The balance after 6 months.

Answer:

The balance after 6 months will be $1787.625

Step-by-step explanation:

The principal amount that Amy opened her savings account with is $1750. We can denote this by P.

The rate of simple interest compounded annually is 4.3% which we may denote by R.

The time period for which we calculate the new balance is 6 months which can be written as 0.5 years (since the rate of interest is compounded annually, we must consider the time period in terms of years).

The amount of money accrued from the interest can be calculated by the formula

$\frac{PRT}{100}$

Putting in the values given in the question, we have

$\frac{(1750)(4.3)(0.5)}{100} = 37.625$

The amount in the bank account will be the principal amount plus the amount of interest accrued that we have calculated above.

Thus, the balance after 6 months will be 1750 + 37.625 = $1787.625.