example 4: mitchell deposits $1,200 in an account that pays 1.5% simple interest. he keeps the money in the…

example 4: mitchell deposits $1,200 in an account that pays 1.5% simple interest. he keeps the money in the account for 3 years without any deposits or withdrawals. how much is in the account after 3 years?

example 4: mitchell deposits $1,200 in an account that pays 1.5% simple interest. he keeps the money in the account for 3 years without any deposits or withdrawals. how much is in the account after 3 years?

Answer

Explanation:

Step1: Calculate the simple - interest amount

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=$1200$, $r = 1.5%=0.015$, and $t = 3$ years. So, $I=1200\times0.015\times3$. $I = 1200\times0.015\times3=54$.

Step2: Calculate the total amount in the account

The total amount $A$ in the account after $t$ years is the sum of the principal $P$ and the interest $I$. So, $A=P + I$. $A=1200 + 54=1254$.

Answer:

$1254$