Respuesta :
Given:
Principal (P) = $120,000
Interest Rate (r) = 4% annually or 0.04 annually
Time in years (t) = 2
Find: interest and the accumulated value after 2 years
Solution:
Since this is simple interest, the formula for getting the simple interest of a principal amount is:
[tex]Interest=Principal\times Rate\times Time[/tex]Since we already identified the principal, rate, and time in the given information, let's plug them into the formula.
[tex]Interest=120,000\times0.04\times2[/tex]Then, multiply the three of them.
[tex]Interest=9,600[/tex]The interest is $9, 600.
Therefore, after 2 years, Nancy will earn $9, 600 in his bank account.
Since Nancy already has $120,000 and he earned $9, 600, then Nancy will have a total of $129, 600 in his bank account after 2 years.
[tex]\begin{gathered} A=Principal+Interest \\ A=120,000+9,600 \\ A=129,600 \end{gathered}[/tex]