Question

Victoria has another account at the bankthat pays 22% simple interest. Howmuch interest will she earn in 8 years onan initial deposit of $250 assuming sheneither adds to nor withdraws from theaccount?

Answer 1

The rule of the simple interest is

$I=\text{PRT}$

P is the initial deposit

R is the rate in decimal

T is the time

Since the initial deposit is $250, then

P = 250

Since the rate is 22%, then

Divide it by 100 to change it to decimal

$R=\frac{22}{100}=0.22$

Since the time is 8 years, then

T = 8

Substitute them in the rule above to find the interest

$\begin{gathered} I=250(0.22)(8) \\ I=440 \end{gathered}$

Then the interset is $440 after 8 years.