How do you calculate the simple interest you would receive in one year on a savings account that earns 5% annual interest. Your beginning balance is $255?

Question

2197 views around the world

You can reuse this answer
Creative Commons License

Answer 1 · 2016-10-26T06:58:36

#SI =$12.75#

You need to use the correct formula to calculate simple interest.

#SI = (PxxRxxT)/100#

P= principal (starting amount)
R= rate of interest as a % - hence the '100'
T = time period, given in years
SI = simple interest.

#A = amount = P+ SI#

Now just substitute in the given values and calculate.

#SI = (255 xx 5 xx 1)/100#

#SI =$12.75#