Math Question Help Needed

label Accounting
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

Compute the simple interest earned on a 1 year $200 deposit that earns 6% per year

Jun 5th, 2015

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Jun 5th, 2015

Using the compound interest formula, we have that
P=$200, r=6/100=0.06, n=1, t=1

A is deposit value in future 

A = P (1+ r/n)^nt

A = 200 (1+0.06/1)^(1)(1)

A = 200 (1.06)

A = $212 

Jun 5th, 2015

Interest = Compounded amount - principle amount

   = 212 - 200

  = $12

Jun 5th, 2015

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