To be able to take her dream vacation, Leila decides to save for
4
years. She opens a savings account with
$500
. The account pays simple interest at an annual rate of
5%
. She doesn't make any more deposits.
Answer the following questions. If necessary, refer to the
list of financial formulas
.
(a) How much total interest will Leila earn?
$
(b) What will the total amount in the account be (including interest)?
(a) The total interest earned can be calculated using the simple interest formula:
I = P * r * t
where I is the interest earned, P is the initial principal, r is the annual interest rate as a decimal, and t is the time in years. Substituting the given values, we get:
I = $500 * 0.05 * 4 = $100
Therefore, Leila will earn a total interest of $100 over the 4-year period.
(b) The total amount in the account can be found by adding the interest earned to the initial principal:
Total amount = $500 + $100 = $600
Therefore, the total amount in the account, including interest, will be $600 after 4 years.
Deshaun deposits
$6000
into an account that pays simple interest at an annual rate of
4%
. He does not make any more deposits. He makes no withdrawals until the end of
2
years when he withdraws all the money.
Answer the following questions. If necessary, refer to the
list of financial formulas
.
(a) How much total interest will Deshaun earn?
$
(b) What will the total amount in the account be (including interest)?
$
(a) The total interest earned can be calculated using the simple interest formula:
I = P * r * t
where I is the interest earned, P is the initial principal, r is the annual interest rate as a decimal, and t is the time in years. Substituting the given values, we get:
I = $6000 * 0.04 * 2 = $480
Therefore, Deshaun will earn a total interest of $480 over the 2-year period.
(b) The total amount in the account can be found by adding the interest earned to the initial principal:
Total amount = $6000 + $480 = $6480
Therefore, the total amount in the account, including interest, will be $6480 after 2 years.
To go on a summer trip, Abdul borrows
$400
. He makes no payments until the end of
3
years, when he pays off the entire loan. The lender charges simple interest at an annual rate of
3%
.
Answer the following questions. If necessary, refer to the
list of financial formulas
.
(a) How much total interest will Abdul have to pay?
$
(b) What will the total repayment amount be (including interest)?
(a) The total interest paid can be calculated using the simple interest formula:
I = P * r * t
where I is the interest paid, P is the initial principal, r is the annual interest rate as a decimal, and t is the time in years. Substituting the given values, we get:
I = $400 * 0.03 * 3 = $36
Therefore, Abdul will have to pay a total interest of $36 over the 3-year period.
(b) The total repayment amount can be found by adding the interest paid to the initial principal:
Total repayment = $400 + $36 = $436
Therefore, the total amount Abdul has to repay, including interest, will be $436 after 3 years.
Tony invested in a savings bond for
5
years and was paid simple interest at an annual rate of
5%
. The total interest that he earned was
$175
. How much did he invest?
If necessary, refer to the
list of financial formulas
.
We can use the simple interest formula to solve for the initial principal, P:
I = P * r * t
where I is the interest earned, r is the annual interest rate as a decimal, t is the time in years, and P is the initial principal. Substituting the given values, we get:
$175 = P * 0.05 * 5
Simplifying the equation, we have:
$175 = 0.25P
Dividing both sides by 0.25, we get:
P = $700
Therefore, Tony invested $700 in the savings bond.
Juan borrowed
$5000
from a lender that charged simple interest at an annual rate of
8%
. When Juan paid off the loan, he paid
$800
in interest. How long was the loan for, in years?
If necessary, refer to the
list of financial formulas
.
We can use the simple interest formula to solve for the time period, t, in years:
I = P * r * t
where I is the interest paid, P is the initial principal, r is the annual interest rate as a decimal, and t is the time period in years. Substituting the given values, we get:
$800 = $5000 * 0.08 * t
Simplifying the equation, we have:
$800 = $400t
Dividing both sides by $400, we get:
t = 2
Therefore, the loan was for 2 years.
Ivanna invested
$800
in a fund for
6
years and was paid simple interest. The total interest that she received on the investment was
$240
. As a percentage, what was the annual interest rate of her investment?
If necessary, refer to the
list of financial formulas
.