Question

calculating interest
the table lists the interest rates offered on savings accounts at various banks. use the information in the table to answer questions 1-4. for each situation, assume no other deposits or withdrawals were made.

bank	rate	type
financial life inc.	2.9%	compound interest
green market group	5%	simple interest
excellence bank	4.15%	compound interest

1. jesse deposits $3,500 in an account at green market group. find the amount of interest earned and the total value of the account after 15 years.

interest earned:
account balance:

1. donna deposits $850 in an account at financial life inc. find the amount of interest earned and the total value of the account after 60 months.

interest earned:
account balance:

1. martin deposits $7,000 in an account at victory bank. find the amount of interest earned and the total value of his account after 36 months.

interest earned:
account balance:

1. lillian deposits $1,600 in an account at excellence bank. find the amount of interest earned and the total value of her account after 18 years.

interest earned:
account balance:

Explanation:

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Question 1 (Green Market Group, Simple Interest)

Step1: Define simple interest formula

Simple Interest: $I = P \times r \times t$
Where $P=\$3500$, $r=0.05$, $t=15$

Step2: Calculate interest earned

$I = 3500 \times 0.05 \times 15 = 2625$

Step3: Calculate account balance

$A = P + I = 3500 + 2625 = 6125$

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Question 2 (Financial Life Inc., Compound Interest)

Step1: Convert time to years

$t = \frac{60}{12} = 5$ years

Step2: Define compound interest formula

Compound Amount: $A = P(1+r)^t$
Where $P=\$850$, $r=0.029$, $t=5$

Step3: Calculate account balance

$A = 850(1+0.029)^5 \approx 850 \times 1.1498 \approx 977.32$

Step4: Calculate interest earned

$I = A - P = 977.32 - 850 = 127.32$

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Question 3 (Victory Bank, Simple Interest)

Step1: Convert time to years

$t = \frac{38}{12} \approx 3.1667$ years

Step2: Calculate interest earned

$I = 7000 \times 0.0325 \times 3.1667 \approx 669.17$

Step3: Calculate account balance

$A = 7000 + 669.17 = 7669.17$

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Question 4 (Excellence Bank, Compound Interest)

Step1: Calculate account balance

$A = 1600(1+0.0415)^{18}$
$A \approx 1600 \times 2.0258 \approx 3241.34$

Step2: Calculate interest earned

$I = 3241.34 - 1600 = 1641.34$

Answer:

1. Interest earned: $2,625; Account balance: $6,125
2. Interest earned: ~$127.32; Account balance: ~$977.32
3. Interest earned: ~$669.17; Account balance: ~$7,669.17
4. Interest earned: ~$1,641.34; Account balance: ~$3,241.34