Given:
Tracy invests $5,000 at 4.5% and the simple interest earned on the investment is moved into a separate account at the end of each year.
To Find:
The total simple interest accumulated in the checking account after 2 years.
Answer:
$450 is the total simple interest accumulated in the checking account after 2 years.
Step-by-step explanation:
The principal sum invested by Tracy is $5000.
The rate of simple interest is given to be 4.5% and the time period given is 2 years.
To calculate the total amount of interest accrued we use the formula
[tex]\frac{P.R.T}{100}[/tex]
where P is the pricipal amount of money, R is the rate of interest and T is the time period.
So, putting the given values into the formula, we have
[tex]\frac{(5000)(4.5)(2)}{100}\\\\=\frac{45000}{100}\\\\=450[/tex]
Thus, $450 is the total simple interest accumulated in the checking account after 2 years.
