Question

sonja and jake just got married. they received $4,500 in gift money and deposited it into a savings account that pays 1.85% simple interest.How much will they have in savings after 3 years?

Answer 1

The total amount in savings after 3 years is $ 4749.75

Solution:

Sonia and Jake received $4,500 in gift money and deposited it into a savings account that pays 1.85% simple interest

To find: Amount after 3 years

The total amount after 3 years is given as:

total amount = principal amount + simple interest

The simple interest is given as:

$\text {simple interest }=\frac{\text { principal } \times \text { number of years } \times \text {rate of interest }}{100}$

Here principal amount = $ 4500

Rate of Interest = 1.85%

Number of years = 3 years

Substituting the above values in formula we get,

$\text { simple interest }=\frac{4500 \times 1.85 \times 3}{100}$

$\text {simple interest }=45 \times 1.85 \times 3=249.75$

Thus simple interest = $ 249.75

total amount = principal amount + simple interest

total amount = 4500 + 249.75

total amount = $ 4749.75

Thus the total amount after 3 years is $ 4749.75