Yvonne put $4,00 in a savings account. At the end of three years, the account had earned $960 in simple interest.

a. How much does she have in her account at the end of three years?

b. At what annual simple interest rate did the account grow? How many more dollars would she have in her account if the interest rate were 1% greater?

Question

Lisa Beard

Mathematics

4 April, 20:26

Yvonne put $4,00 in a savings account. At the end of three years, the account had earned $960 in simple interest.

a. How much does she have in her account at the end of three years?

b. At what annual simple interest rate did the account grow? How many more dollars would she have in her account if the interest rate were 1% greater?

+4

Answers (1)

Know the Answer?

Hannah · Answer 1

Important variables to know:

I = interest

P = principal (investment)

R = simple interest rate

T = years

Formula: I = PRT

What information do we have?

I = $960

P = $4000

T = 3 years

R = ?

Plug into formula:

960 = 4000 (3) (R)

960 = 12000R

R = 960/12000

R =.08

A. $4000 + $960 = $4960. (A = P + I)

B. 8% (.08)

Part 2: 1080 = 4000*.09*3

A = 5080 - 4960 = $420.