Problema Solution
Find the simple interest on a $400 investment made for 5 years at an interest rate of 7%/year. What is the accumulated amount?
Answer provided by our tutors
Simple Interest
I = P*r*t
where
P = $400 is the principal
r = 0.07 or 7% is the annual interest rate
t = 5 years is the time in years
I = 400*0.07*5
I = $140
the simple interest is $140
the accumulated amount A = P + I = 400 + 140 = $540
the accumulated amount is $540.