Linear Equations with Ratios and Rates - Basic Math

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Question

I put in a bank account at a annual simple interest rate. How much interest will have accumulated after two years?

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Answer

This is a simple interest rate problem, for which we use the formula:

Interest = P x r x t

P is the principal, or original loan amount; r is the annual interest rate; and t is the number of years in question.

In this problem, P = $9,000; r = 4%; and t = 2 years. Plugging these into the formula gives us:

So, after two years the account has gathered $720 in interest.

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