Question

Answer the following questions10. How much interest will be earned in 3 years from $730placed in a savings account at 6.5% simple interest?

Answer 1

Compound Interest Formula

$A=P\times(1+rt)$

where A is the accrued amount, P is the principal amount, r the rate, and t the time.

From our problem we can get:

• P = $730

,

• r = 6.5% = 0.065

,

• t = 3

Replacing them in the formula:

$A=730\times(1+(0.065)\times(3))$

Simplifying:

$A=730\times(1+0.195)$$A=730\times(1.195)$$A=872.35$

Answer: $872.35