You put $1,000 into a savings account that pays 7% in annual interest. how much money will you have after 7 years if the account pays only simple interest?



Answer :

The total amount in the bank account after 7 years will be $1490

Simple interest is a way to figure out how much interest will be charged on a sum of money at a specific rate and for a specific duration of time. The principal amount in simple interest is constant.

The formula for simple interest = (P*R*T)/100

where P = principal amount

R = rate of interest

T = time in years

As per the question,

P = 1000

R = 7%

T = 7 Years

Simple interest will be = (1000*7*7)/100 = $490

The amount of money in the savings account at the end of 7 years will be $1000 + $490 = $1490

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