Question

to be able to buy a new computer, jenny decides to save for 5 years. she opens a savings account with $600. the account pays simple interest at an annual rate of 6%. she doesnt make any more deposits. answer the following questions. if necessary, refer to the list of financial formulas. (a) how much total interest will jenny earn? $\square$ (b) what will the total amount in the account be (including interest)? $\square$

Explanation:

Part (a)

Step1: Recall simple interest formula

The formula for simple interest is $I = P \times r \times t$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal), and $t$ is the time in years.
Here, $P = \$600$, $r = 6\% = 0.06$, and $t = 5$ years.

Step2: Substitute values into the formula

Substitute $P = 600$, $r = 0.06$, and $t = 5$ into $I = P \times r \times t$.
$I = 600 \times 0.06 \times 5$

Step3: Calculate the interest

First, calculate $600 \times 0.06 = 36$. Then, $36 \times 5 = 180$.
So, the simple interest $I = \$180$.

Step1: Recall total amount formula for simple interest

The total amount $A$ in a simple - interest account is given by the formula $A=P + I$, where $P$ is the principal and $I$ is the interest. We already know from part (a) that $P=\$600$ and $I = \$180$.

Step2: Calculate the total amount

Substitute $P = 600$ and $I = 180$ into the formula $A=P + I$.
$A=600 + 180$

Step3: Find the sum

$600+180 = 780$.

Answer:

$\$180$

Part (b)