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Question

Difficulty: EasyPercent Change and Interest

An investor deposits $800\$800 into a savings account that pays a simple annual interest rate of 5%5\%. If no additional deposits or withdrawals are made, what is the total interest, in dollars, earned on the account after 33 years?

Answer: 120 dollars

Answer

The total interest earned after 3 years is 120 dollars.
The total interest earned is computed using the simple interest formula I=P×r×tI = P \times r \times t. Substituting P=800P = 800, r=0.05r = 0.05, and t=3t = 3 yields I=800×0.05×3=120I = 800 \times 0.05 \times 3 = 120 dollars.

Step-by-Step Solution

1
Identify the principal, rate, and time from the problem stem.
Principal P=$800P = \$800, interest rate r=5%=0.05r = 5\% = 0.05, and time t=3t = 3 years.
These values are required to apply the simple interest formula.
2
Calculate simple interest using I=P×r×tI = P \times r \times t.
I=800×0.05×3=120I = 800 \times 0.05 \times 3 = 120.
Simple interest accumulates linearly over time based on the initial principal.

Key Concept

Simple Interest Calculation
Estimated Time:45s
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Topics

Percent Change and Interest

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