Answered

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Kim places $1,250 into a bank account that pays 4.25% simple interest. if she does not add or remove any money from the account, how much interest will she earn after 60 months (anwers must be written as money-rounded to the hundred to the place)

Sagot :

The rule of the simple interest is

[tex]I=P\times R\times T[/tex]

P is the initial amount

R is the rate in decimal

T is the time in years

Since Kim places $1250, then

P = 1250

Since the rate is 4.25%, then

[tex]R=\frac{4.25}{100}=0.0425[/tex]

Since the time is 60 months, divide it by 12 to change it to years

[tex]\begin{gathered} T=\frac{60}{12} \\ T=5 \end{gathered}[/tex]

Substitute them in the rule above

[tex]\begin{gathered} I=1250\times0.0425\times5 \\ I=265.625 \end{gathered}[/tex]

Round it to the nearest hundredth

I = $265.63

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