a student’s parents invested $5,000 in a college savings account that pays 4.85% annual simple interest. no…

a student’s parents invested $5,000 in a college savings account that pays 4.85% annual simple interest. no additional deposits or withdrawals will be made. which amount is closest to the interest earned on the account at the end of 15 years? a $5,174.11 b $10,174.11 c $3,637.50 d $8,637.50

a student’s parents invested $5,000 in a college savings account that pays 4.85% annual simple interest. no additional deposits or withdrawals will be made. which amount is closest to the interest earned on the account at the end of 15 years? a $5,174.11 b $10,174.11 c $3,637.50 d $8,637.50

Answer

Explanation:

Step1: Recall simple - interest formula

The simple - interest formula is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years.

Step2: Convert the interest rate to decimal

Given $r = 4.85%=0.0485$, $P = 5000$, and $t = 15$.

Step3: Calculate the interest

Substitute the values into the formula: $I=Prt=5000\times0.0485\times15$. $I = 5000\times0.0485\times15=5000\times0.7275 = 3637.5$

Answer:

C. $3,637.50$