Tracy started a saying account that is set up so that the simple interest earned on the investment is moved into a separate account at the end of each year. Tracy invests $5,000 at 4.5%, what is the total simple interest accumulated in the checking account after 2 years? A) $4.50 B)$45 C) $450 D)$4,500 E) $45,000* PLZ HELP!!
5000 * 0.45 * 2 = ?
No -- that's way, way too high
Multiply:
5000 * 0.045 * 2 = _$______
I = P*r*t = 5000*0.045*2 =
To find the total simple interest accumulated in the checking account after 2 years, we need to use the formula for simple interest:
Interest = Principal × Rate × Time
In this case, the principal is $5,000, the rate is 4.5% (or 0.045 as a decimal), and the time is 2 years.
First, calculate the interest earned in the first year:
Interest_1 = $5,000 × 0.045 × 1
Next, calculate the interest earned in the second year:
Interest_2 = $5,000 × 0.045 × 1
Finally, find the total interest accumulated by adding the interest earned in both years:
Total Interest = Interest_1 + Interest_2
Now, let's do the calculations:
Interest_1 = $5,000 × 0.045 × 1 = $225
Interest_2 = $5,000 × 0.045 × 1 = $225
Total Interest = $225 + $225 = $450
Therefore, the total simple interest accumulated in the checking account after 2 years is $450, which corresponds to option C) $450.