interest will the account earn after 3 years?

O $75

O $50

O $40

Asked
9 months ago

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967195 times

year in his birthday. The account pays 2.5% simple interest. How much

interest will the account earn after 3 years?

O $75

O $50

O $40

interest will the account earn after 3 years?

O $75

O $50

O $40

**Given:**

Beau's grandmother started depositing $500 in a savings account each year in his birthday

Rate of simple interest = 2.5%

Time = 3 years

**To find:**

The interest.

**Solution:**

Formula for simple interest:

where, P is principal, r is rate of interest and t is time in years.

Interest for first year is

New principal =

Interest for second year is

New principal =

Interest for third year is

Total interest for 3 years is

So, interest after 3 years is $75.

**Therefore, the correct options A.**

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