Question

You deposit $500 in an account that earns simple interest at an annual rate of 4%. How much money is in the account after 6 years?

Answer 1

The formula for simple interest is:

I = P * r * t

Where:

I = Interest earned

P = Principal amount (initial amount deposited)

r = Annual interest rate (as a decimal)

t = Time in years

Using the given values, we have:

P = $500

r = 0.04 (4% expressed as a decimal)

t = 6 years

I = P * r * t

I = $500 * 0.04 * 6

I = $120

So the interest earned after 6 years is $120. To find the total amount of money in the account, we add the interest to the principal:

Total = P + I

Total = $500 + $120

Total = $620

Therefore, there will be $620 in the account after 6 years.

Explanation: