Question

A deposit of $7,912 is made into a new account that earns 5.75% simple interest. No additional deposits or withdrawals will be made for 2 years.

Which amount is cl

Answer 1

To calculate the amount of simple interest accrued on a deposit, you can use the formula:

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

Where:
- \(I\) is the interest earned,
- \(P\) is the principal amount (initial deposit),
- \(r\) is the annual interest rate (as a decimal),
- \(t\) is the time the money is invested or borrowed for, in years.

Given:
- \(P = 7,912\),
- \(r = 5.75\% = 0.0575\),
- \(t = 2\) years.

Now plug the values into the formula:

\[
I = 7,912 \times 0.0575 \times 2
\]

Calculating step-by-step:

1. Calculate \(0.0575 \times 2 = 0.115\).
2. Then calculate the interest:

\[
I = 7,912 \times 0.115 = 909.88
\]

So, the interest earned over 2 years is approximately **$909.88**.

Now, to find the total amount in the account after 2 years, add the interest to the principal:

\[
\text{Total Amount} = P + I = 7,912 + 909.88 = 8,821.88
\]

Thus, the total amount in the account after 2 years will be approximately **$8,821.88**.