Question

$3 500 is invested in a savings account which pays simple interest at a rate of 7,5% per annum. Calculate the balance accumulated by the end of 2 years

Answer 1

the balance accumulated by the end of 2 years with simple interest is $4,025.

Explanation:

A = the final balance

P = the principal amount (initial investment)

r = the annual interest rate (as a decimal)

t = the number of years

In this case, the principal amount (P) is $3,500, the annual interest rate (r) is 7.5% or 0.075, and the time (t) is 2 years.

A = 3500(1 + 0.15)

A = 3500(1.15)

A = $4,025