A savings account earns 5% simple interest per year. The principal is $1200. What is the balance after 4 years?
1440, got it form person above
To calculate the balance after 4 years with 5% simple interest, follow these steps:
Step 1: Determine the interest earned per year.
Interest = Principal x Rate
Interest = $1200 x 5% = $60
Step 2: Calculate the interest earned over 4 years.
Total Interest = Interest per year x Number of years
Total Interest = $60 x 4 = $240
Step 3: Calculate the balance after 4 years.
Balance = Principal + Total Interest
Balance = $1200 + $240 = $1440
Therefore, the balance after 4 years would be $1440.
To find the balance after 4 years, you can use the formula for simple interest:
Interest = Principal * Rate * Time
where:
- Principal is the initial amount of money (in this case, $1200)
- Rate is the interest rate (in this case, 5% or 0.05)
- Time is the number of years (in this case, 4 years)
First, calculate the interest earned over the 4 years:
Interest = $1200 * 0.05 * 4 = $240
Next, add the interest earned to the principal to get the balance:
Balance = Principal + Interest = $1200 + $240 = $1440
Therefore, the balance after 4 years would be $1440.
I = PRT
I = 1200 * 0.05 * 4
I = ?
Add the interest to the principle to find the balance.