Question

SAVINGS ACCOUNT How much interest will Hannah earn in 4 years if she deposits $630 in a savings account at 6.5% simple interest?

Answer 1

Answer:

$793.80

Step-by-step explanation:

You want to calculate the interest on $630 at 6.5% interest per year after 4 year(s).

The formula we'll use for this is the simple interest formula, or:

I = P x r x t

Where:

P is the principal amount, $630.00.

r is the interest rate, 6.5% per year, or in decimal form, 6.5/100=0.065.

t is the time involved, 4....year(s) time periods.

So, t is 4....year time periods.

To find the simple interest, we multiply 630 × 0.065 × 4 to get that:

The interest is: $163.80

Usually now, the interest is added onto the principal to figure some new amount after 4 year(s),

or 630.00 + 163.80 = 793.80. For example:

If you borrowed the $630.00, you would now owe $793.80

If you loaned someone $630.00, you would now be due $793.80

If owned something, like a $630.00 bond, it would be worth $793.80 now.