Alex invested $2,550 in an account that pays 5 percent simple interest. How much money will he have at the end of four years?
A) $2,650.00
B) $3,100.26
C) $3,060.00
D) $3,250.00
E) $3,099.54

Question

Quizplus · Accepted Answer

Simple interest formula:

I = P * r * t

Where: 
I = Interest earned 
P = Principal amount 
r = Interest rate 
t = Time in years

Given: 
P = $2,550 
r = 0.05 
t = 4 years

Plugging in the values, we get:

I = $2,550 * 0.05 * 4 = $510

Total amount at the end of 4 years:

Amount = Principal + Interest

Amount = $2,550 + $510 = $3,060

Therefore, the best choice is C.

Alex Invested $2,550 in an Account That Pays 5 Percent