You deposited $600 dollars in a savings account that earns a simple interest rate of 1.5% per year. You want to keep the money in the account for 6 years. How much interest will you earn?

Question

You deposited $600 dollars in a savings account that earns a simple interest rate of 1.5% per year. You want to keep the money in the account for 6 years. How much interest will you earn?

Answer 1

the underlying formula that you want to use to solve this one is

I = PRT

plugging in the parameters from this situation that becomes

I = $600 x 0.015 x 6

I = $54

meaning that you will earn $54 in simple interest over 6 years

Answer 2

The formula for simple interest is I=PRT, where I is interest, P is principal and T is time.

Answer 3

600(1+(.015)(6))= 600(1.09)=$654 at the end of 6 years at simple 1.5% interest, no componding

.015x600=

$9 interest per year, 6 years = 9x6=$54 itotal interest