Question

FINANCIAL LITERACY Cleavon has money in an account that earns 3% simple interest. The formula for computing simple interest is $I=\mathbf{Pr}t$, where$I$ is the interest earned, P represents the principal that he put into account, r is the interest rate (in decimal form), and t represents time in years.

a. Cleavon makes a deposit of$\mathbf{\backslash (}\mathbf{2}c$ and leaves it for 2 years. Write a monomial that represents the interest earned.

b. If c represents a birthday gift of \)250, how much will Cleavon have in this account after 2 years?

Short answer

a. The monomial that represents the interest earned is $\mathbf{0}\mathbf{.}\mathbf{12}c$.

b. After 2 years Cleavon will have $280 in his account.

Step-by-step solution

Part a. Step 1. Replace variables with given values.

Replace P with 2c, r with 0.03 and t with 2 in $I=P\mathrm{r}t$.

$I=2c\times 0.03\times 2$

Part a. Step 2. Solve.

Solve the equation obtained above.

$I=0.12c$

Part a. Step 3. Write a conclusion.

The monomial that represents the interest earned is $0.12c$.

Part b. Step 1. Replace variables with given values.

Replace c with 250 in $I=0.12c$.

$I=0.12\left(250\right)$

Part b. Step 2. Solve.

Solve the equation obtained above.

$I=30$

Therefore, Cleavon will make interest of $30.

Part b. Step 3. Write a conclusion.

As Cleavon will make interest of $30, in his account he will have

$\$250+\$30=\$280$

Therefore, after 2 years Cleavon will have $280 in his account.