Answer:
Nolan's account balance would be $1800 after 4 years
Explanation:
Simple Interest
Interest is calculated only on the original principal of a loan or on the balance of an account.
Unlike compound interest where the interest earned in the compounding periods is added to the new principal, simple interest only considers the principal to calculate the interest.
The interest earned is calculated as follows:
I=P.r.t
Where:
I = Interest
P = initial principal balance
r = interest rate
t = time
Nolan has a savings account that pays r=5% = 0.05 with an initial balance of P=$1500. It's required to find the account's balance after t=4 years.
Substituting in the formula:
I = $1500 * 0.05 * 4
I = $300
The final balance is:
A = P + I = $1500 + $300 = $1800
Nolan's account balance would be $1800 after 4 years