Question

If Diego closes his account after the four years, how much money will he have total? Diego deposited
$
10
,
000
$10,000 for
4
4 years at a rate of
6
%
6% simple interest.
​Find the amount of interest Diego earned after four years.

Answer 1

To calculate the simple interest earned by Diego, you can use the formula for simple interest:

\[
I = P \times r \times t
\]

where:
- \(I\) is the interest,
- \(P\) is the principal amount (initial deposit),
- \(r\) is the rate of interest (expressed as a decimal),
- \(t\) is the time in years.

In this case:

- \(P = 10,000\)
- \(r = 6\% = 0.06\)
- \(t = 4\) years

Now, we can calculate the interest:

\[
I = 10,000 \times 0.06 \times 4
\]
\[
I = 10,000 \times 0.24
\]
\[
I = 2,400
\]

So, the interest earned after four years is **$2,400**.

To find the total amount Diego will have after closing his account, we add the interest to the principal:

\[
\text{Total Amount} = P + I = 10,000 + 2,400 = 12,400
\]

Therefore, Diego will have a total of **$12,400** after four years.