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27 July, 18:35

Item 6 A savings account earns 5% simple interest per year. The principal is $1200. What is the balance after 4 years?

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  1. 27 July, 21:15
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    The formula for simple interest is

    I=PRT

    here P=$1200

    R=5% or 0.05

    T=4 years

    plugging in the formula we get

    I=1200*0.05*4=240

    Balance after four years = 1200+240=$1440
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