Where: A = P(1 + rt)
A = $1,265.00
I = A - P = $165.00
Equation:
A = P(1 + rt)
Calculation:
First, converting R percent to r a decimal
r = R/100 = 5%/100 = 0.05 per year.
Solving our equation:
A = 1100(1 + (0.05 × 3)) = 1265
A = $1,265.00
The total amount accrued, principal plus interest, from simple interest on a principal of $1,100.00 at a rate of 5% per year for 3 years is $1,265.00.
