$593.25 will be available in your account after two years and they earn $68.25 of interest amount, if you put $525 into a savings account that paid a simple interest rate of 6.5%.
Step-by-step explanation:
The given is,
You put $525 into a savings account
Simple interest rate of 6.5%,
2 years
Step:1
Formula to calculate the future amount with simple interest rate,
[tex]F=P(1+(r)(t))[/tex]............................(1)
Where,
F - Future amount
P - Initial investment
r - Rate of interest
t - No.of year
From given,
[tex]F=525(1+(0.065)(2))[/tex]
[tex]= 525 ( 1+0.13)[/tex]
[tex]= 525 (1.13)[/tex]
= 593.25
F = $ 593.25
Step:2
Formula to calculate the interest amount,
[tex]I=F-P[/tex]....................................(2)
Where, I - Interest amount
F - Future amount
P - Initial amount
From the F and P values equation (2) becomes,
I = 593.25 - 525
= 68.25
I = $68.25
Result:
$593.25 will be available in your account after two years and they earn $68.25 of interest amount, if you put $525 into a savings account that paid a simple interest rate of 6.5%.
