Jackson invested $680 in an account that earned 1.5% simple interest annually. He made no additional deposits or withdrawals for two years. What was Jackson’s account balance at the end of two years

Answer 1

To calculate Jackson's account balance at the end of two years, we first need to calculate the interest earned each year.

First, calculate the interest earned in the first year:
Interest = Principal * Rate
Interest = $680 * 0.015
Interest = $10.20

Add the interest earned in the first year to the principal to get the balance at the beginning of the second year:
Balance at the beginning of the second year = Principal + Interest
Balance at the beginning of the second year = $680 + $10.20
Balance at the beginning of the second year = $690.20

Calculate the interest earned in the second year:
Interest = Balance at the beginning of the second year * Rate
Interest = $690.20 * 0.015
Interest = $10.35

Add the interest earned in the second year to the balance at the beginning of the second year to get the final account balance at the end of two years:
Final account balance = Balance at the beginning of the second year + Interest
Final account balance = $690.20 + $10.35
Final account balance = $700.55

Therefore, Jackson's account balance at the end of two years would be $700.55.