Edward deposited $5,500 into a savings account 4 years ago. The interest rate is 5%. How much money did Edward earn in interest? What would be his new account balance?
Mathematics · Middle School · Tue Nov 03 2020
Answered on
Given:
Principal amount(P) = $5,500
Rate ( r ) = 5% or 0.05
Term (t) = 4 years
Formula for Simple Interest:
I = Prt
Solution:
Substitute the given values of P, r, and t to the formula for simple interest.
I = (5,500)(0.05)(4)
I = $1,100
A = P + I
Future Amount = Principal Amount + Interest
Future Amount = $5,500 + $1,100
Future Amount = $6,600
Final answer:
Future Amount = $6,600