Explanation: Use the formula for the amount after simple interest: A = P(1 + rt) “A” is the (final) amount. “P” is the principal, or starting amount. “r” is the interest rate in decimal form. “t” is time, usually in years.
We are given the following: P = 16,000 r = 9% = 0.09 t = 5 We are solving for “A”.
Substitute values for “P”, “r” and “t” into the formula to find “A”. A = P(1 + rt) A = 16,000(1 + (0.09)(5)) Simplify brackets first A = 16,000(1 + 0.45) A = 16,000(1.45) A = 23,200
Therefore, the total amount in the account at the end of the five year period is 23,200.
