Answer :
Henry places $1.200 in a savings account that earns 8% simple interest per year. How much does he earn after 4 years?
How much does he earn after 12 years?
we know that
The simple interest formula is equal to
[tex]A=P(1+rt)[/tex]
[tex]A=P\mleft(1+rt\mright)[/tex]where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest
t is Number of Time Periods
Part a) How much does he earn after 4 years?
in this problem we have
t=4 years
P=$1,200
r=8%=8/100=0.08
substitute in the formula above
[tex]\begin{gathered} A=1,200\cdot(1+0.08\cdot4) \\ A=\$1,584 \end{gathered}[/tex]Part b)
How much does he earn after 12 years?
in this problem we have
t=12 years
P=$1,200
r=8%=8/100=0.08
substitute in the formula above
[tex]\begin{gathered} A=1,200\cdot(1+0.08\cdot12) \\ A=\$2,352 \end{gathered}[/tex]