Question

you deposit $420 in an account that earns simple interest at an annual rate of 5%. if no other deposits or withdrawals were made, what is the total amount of money in the account at the end of 3 years? the total amount in the account is $\square$.

Explanation:

Step1: Recall simple interest formula

The formula for total amount with simple interest is $A = P(1 + rt)$, where $P$ is principal, $r$ is annual rate, $t$ is time in years.

Step2: Identify given values

$P = 420$, $r = 0.05$, $t = 3$

Step3: Substitute values into formula

$A = 420(1 + 0.05 \times 3)$

Step4: Calculate inside parentheses first

$0.05 \times 3 = 0.15$, so $1 + 0.15 = 1.15$

Step5: Compute final amount

$A = 420 \times 1.15 = 483$

Answer:

483