April 16, 2014

Homework Help: simple intrest

Posted by Veronica on Tuesday, February 20, 2007 at 9:00pm.

My daughter brought home a work sheet and I have no clue where to begin to help her and she seems to have no clue either.

the questions are
1. Find the final balance in each account.

$800 at 4.25% simple intrest for 6 years

2. $2,000 at 6% compounded annually for 3 years

please help us

interest = principal x rate x time.
int = 800 x 0.0425 x 6 =??
int + 800 = final balance.

You don't say what you want calculated here.
final balance = (1.00+rate)time=(1.06)3 = ??

If you want the interest just subtract 2,000 from the final balance.

I hope this helps.
If some of the exponents don't print well I will post a quickie correction.

For simple interest, there is a formula:

I = P x r x t

I is the total interest , r is the rate, and t is the time. Thus, the final balance is the initial 800 + I.

For compound interest, it is a little more complicated. Find the new balance after one year by using the above. Then, you need the interest on the NEW balance for the second year (that is the difference between compound and simple), and then add this new interest to the balance after one year, and you have the end of second year balance. Then you do the same for the 3rd year.

There is a formula for compound interest, but it may be beyond your daughter's level.

It is M = P(1 + i)^n

where M is final amount, P is the principal, i is the rate, and n is the number of years.

Let me know if I can help further.

Here's a simple interest calculator:

And here's a compound interest calculator:


Correction to 2.
Obviously I omitted the principal.
final balance = 2,000*(1.06)3 = 2382.03

Le't see if this looks any better.

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