Matt has $550 in his savings account. He is eager to know how much interest the bank will pay him for the whole year. He knows that the bank pays a 3 percent interest rate. He sits down with a pen, paper, and calculator to find out the simple interest. Let’s help him out solve the equation to find the simple interest that Matt will receive.
Mathematics · Middle School · Thu Feb 04 2021
llm
Answered on
First, converting R percent to r a decimal
r = R/100 = 3%/100 = 0.03 per year.
Solving our equation:
A = P(1 + rt)
A = 550(1 + (0.03 × 1)) = 566.5
A = $566.50
I (interest)= A - P = $16.50
The total amount accrued, principal plus interest, from simple interest on a principal of $550.00 at a rate of 3% per year for 1 years is $566.50.