Edward deposited 9500$ into a savings account 3 years ago. The simple interest rate is 3%. How much money did Edward earn in interest? What would be his new account balance?
To calculate the interest earned, we can use the simple interest formula:
Interest = (Principal × Rate × Time)
where:
Principal = $9500
Rate = 3% = 0.03 (as a decimal)
Time = 3 years
Interest = ($9500 × 0.03 × 3) = $855
Therefore, Edward earned $855 in interest.
To calculate the new account balance, we can add the interest earned to the initial principal:
New balance = Principal + Interest
New balance = $9500 + $855
New balance = $10355
Therefore, Edward's new account balance is $10355.