+0

# THIS CONFUZEZ ME PLZ HELP

+1
85
5
+6

An account has a principal of ​$500 and a simple interest rate of 4.2​%. The table shows the simple interest earned and the new account balance for​ 1, 2, and 3 years. Complete the table for the fourth year. WHAT IS THE ANWSER I THOUGHT IT WAS 84.00 AND 584.00 IN A TABLE TELL ME IF IM RIGHT. Dec 15, 2018 ### 5+0 Answers #1 +4396 +1 xxxxxxxx . Dec 15, 2018 edited by Rom Dec 15, 2018 #5 +679 -1 why is this here? PartialMathematician Dec 16, 2018 #2 +679 0 The formula for loans is $$x\cdot (1+r)^y$$. x represents the initial loan amount. In this example, x =$500.

r represents the interest rate, whether it is simple or compound (for compound, there is a slightly different formula). in this example, r = 0.042.

y represents the number of years the loan is not paid back yet. In this example, y is 1, 2, or 3.

- PM

Dec 15, 2018
#4
+679
-1

PartialMathematician  Dec 16, 2018
#3
+2

If it is  "simple interest" as he/she says in the question, then you don't use exponentiation, which automatically means "compound interest". In this case, you would simply: multiply the principal x interest rate x number of periods, or years in this case. So:

$500 x 0.042 x 4 =$84.00 simple interest earned over 4 years.

$500 +$84.00     =\$584.00 principal + simple interest in year 4.

YES, YOU ARE RIGHT !!.

Dec 15, 2018