Question

John deposited $600 into a savings account at an interest rate of 5% per year. How much interest will he earn in 3 years? What will be his account balance, including interest, after 3 years?

Answer 1

Simple interest: 690, compound interest: 694.5

Explanation:

Simple interest = PRT/100 = 600*5*3/100 = 90 = 600+90 = 690

compound interest = P(1+r/100)^n = 600(1+5/100)^3 = 694.5

Your answer depends on if its simple or compound interest if not said so either of the answers I have given to you is right :)

Answer 2

$690

Explanation:

To find the interest earned in three years, we can use the interest formula

Interest = Principal x Rate x Time

- Principal = $600 (the amount John deposited)

- Rate = 5% per year (as a decimal, this is 0.05)

- Time = 3 years

Interest = $600 x 0.05 x 3 = $90

Therefore, John will earn $90 in interest over 3 years.

To find his account balance, including interest, after 3 years, we can simply add the interest earned to the original principal:

Account balance = Principal + Interest

Account balance = $600 + $90 = $690

Therefore, John's account balance, including interest, after 3 years will be $690.