deandre deposits $7000 into an account that pays simple interest at an annual rate of 3%. he does not make…

deandre deposits $7000 into an account that pays simple interest at an annual rate of 3%. he does not make any more deposits. he makes no withdrawals until the end of 4 years when he withdraws all the money. answer the following questions. if necessary, refer to the list of financial formulas. (a) how much total interest will deandre earn? (b) what will the total amount in the account be (including interest)?

deandre deposits $7000 into an account that pays simple interest at an annual rate of 3%. he does not make any more deposits. he makes no withdrawals until the end of 4 years when he withdraws all the money. answer the following questions. if necessary, refer to the list of financial formulas. (a) how much total interest will deandre earn? (b) what will the total amount in the account be (including interest)?

Answer

Explanation:

Step1: Recall simple - interest formula

The simple - interest formula is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. Given $P=$700$, $r = 0.03$ (since $3%=0.03$), and $t = 4$ years. $I=Prt=700\times0.03\times4$

Step2: Calculate the interest

$I = 700\times0.03\times4=84$

Step3: Calculate the total amount

The total amount $A$ in the account (including interest) is given by the formula $A=P + I$. We know $P = 700$ and $I = 84$. $A=700 + 84=784$

Answer:

(a) $84 (b) $784