Question

An account is opened with an initial balance of $950 and a simple annual interest rate of 1.6%. What is the balance after 5 years Answers 1. the answer is$1,026.

Solving: Use Simple interest formula, I=Prt.

Make the rate into a decimal (1.6% -> 0.016)

plug in the numbers into the formula. 950 x 0.016 x 5 = 76$. 76$ will be our interest, now to find the balance we would have to add the the starting money (950) with our interest (76$), resulting in our answer of$1,026 after 5 years.

2. $1,026. This is because$950 multiplied by 1.6% is equal to $15.20. This multiplied by 5 years is equal to$76. $950 multiplied by$76 is equal to \$1,026.