Question

Wilburs Grandmother opened a saving account for him on his 5th birthday. She deposited $100.00 in this account to open it. The account earns simple interest at an annual rate of 5%. If no further deposits or no withdrawals are made, What will be the Account balance after 5 years?

Answer 1

Answer:

Step-by-step explanation:

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest paid on the amount deposited.

P represents the principal or amount that she deposited to open the account.

R represents interest rate

T represents the duration for which the deposit was left in the account in years.

From the information given,

P = $100

R = 5%

T = 5 years

I = (100 × 5 × 5)/100 = $25

The balance in the account after 5 years is

100 + 25 = $125