Yvonne put $4,000 in a savings account. At the end of 3 years, the account had earned $960 in simple interest.
A. how much does she have in her account at the end of 3 years?
B. at what annual simple interest rate did the account grow?
c. how many more dollars would she have in her account if the interest rate were 1% greater?
I found this on a website called Brainly and I think it is very helpful:
A) At the end of 3 years the amount in the account = Principal + Interest
Amount = 4000 + 960 = 4960
Amount at the end of 3 years = $4960
b) Formula for Rate , R = 100I/(PT)
Where I = Interest = 960, P = Principal = 4000, T= Time = 3 years
R = (100 × 960) / ( 4000 × 3)
R = 8
Rate, R = 8% per annum.
c) If the rate was 1% more, R = 8 + 1 = 9% per annum
Interest, I = PRT/100
Interest, I = 4000 × 9 × 3 /100 = 1080
Amount in her account would have been = $4000 + $1080 = $5080
Amount more = $5080 - $4960 = $120
She would have had $120 more should the rate were 1% greater.