A student’s parents invested $5,000 in a college savings account that pays 4.85% annual simple interest. No additional deposits or withdrawals will be made.
Which amount is closest to the interest earned on the account at the end of 15 years

To find the interest earned using **simple interest**, we can apply the formula:

\[
I = P \times r \times t
\]

Where:
- $ I $ is the interest earned.
- $ P $ is the principal amount (initial investment).
- $ r $ is the annual interest rate (in decimal form).
- $ t $ is the time in years.

Given:
- $ P = 5000 $
- $ r = 4.85\% = 0.0485 $
- $ t = 15 \, \text{years} $

Now, substituting these values into the formula:

\[
I = 5000 \times 0.0485 \times 15
\]

Let's calculate this.The interest earned on the account at the end of 15 years is **$3,637.50**.

Would you like more details or have any questions?

Here are 5 related questions to explore this topic further:
1. What is the total amount in the account after 15 years?
2. How does simple interest differ from compound interest?
3. How would the interest change if the interest rate was 6% instead?
4. How much interest would be earned in 20 years instead of 15 years?
5. What is the formula for calculating compound interest?

**Tip**: Simple interest is straightforward, as it is based only on the initial principal. In contrast, compound interest grows faster because it adds interest on both the initial principal and accumulated interest.

A student’s parents invested $5,000 in a college savings account that pays 4.85% annual simple interest. No additional deposits or withdrawals will be made. Which amount is closest to the interest earned on the account at the end of 15 years?

Find out how to calculate the interest earned on a $5,000 college savings account with 4.85% simple interest over 15 years. Learn the simple interest formula and apply it to solve real-world financial problems. Suitable for students in Grades 6-8.

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