Edward deposited $10,000 into a savings account 2 years ago. the simple interest rate is 2% How much money did Edward earn in interest? what would his new account balance be?

Question

Iris

Mathematics

14 October, 16:05

Edward deposited $10,000 into a savings account 2 years ago. the simple interest rate is 2% How much money did Edward earn in interest? what would his new account balance be?

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Answers (1)

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Sanai Forbes · Answer 1

Interest Earned: $400 / New Account Balance: $10,400

Step-by-step explanation:

We will use the simple interest formula for this problem.

A = P (1 + rt)

P = initial balance

r = annual interest rate

t = time

We can plug in your values into the equation. Remember to convert the percent into its decimal form (2% - >.02):

A = 10,000 (1 +.02 x 2) = 10,400