Question

IX Learning Seventh grade > M.12 Simple interest ETY Lacey has $25,250 in a savings account. The interest rate is 5% per year and is not compounded. How much will she have in 4 years? Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

Answer 1

The formula for interest earned is given as:

$i=\text{prt}$

Where

p = 25,250

r = 5% or 5/100 = 0.05

t = 4 years

Substituting, we get:

$\begin{gathered} i=\text{prt} \\ i=25250\times0.05\times4 \\ i=5050 \end{gathered}$

Thus, interest earned is $5050

So,

Total Amount after 4 years is 25,250 + 5050 = $30,300

Answer

$30,300