Question
Rita deposits \( \$ 600 \) into an account that pays simple interest at a rate of \( 5 \% \) per year. How much interest will she be paid in the first 6 years?
Ask by Bowen Ray. in the United States
Feb 20,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
Rita will earn $180 in interest over the first 6 years.
Solution
To find the simple interest accumulated over a period of time, we use the formula:
Interest = Principal × Rate × Time
Here, the principal is $600, the rate is 5% per year (which is 0.05 when expressed as a decimal), and the time is 6 years. Plugging in these values:
Interest = 600 × 0.05 × 6
Interest = 180
Therefore, Rita will be paid $180 in interest over the first 6 years.
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Simplify this solution Mind Expander
To calculate the interest earned on a principal amount using simple interest, you can use the formula: \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] For Rita's deposit of \( \$600 \), a rate of \( 5\% \) (which is \( 0.05 \) in decimal), and a time period of \( 6 \) years, we can plug in the values: \[ \text{Interest} = 600 \times 0.05 \times 6 \] Now, let's do the math: \[ \text{Interest} = 600 \times 0.05 = 30 \] Then multiply by \( 6 \): \[ \text{Interest} = 30 \times 6 = 180 \] So, the total interest Rita will be paid in the first 6 years is \( \$180 \).
