How do you calculate the simple interest you would receive in one year on a savings account that earns 5% annual interest. Your beginning balance is $255?

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Answer 1 · 2016-10-26T06:58:36

$SI =$12.75$

You need to use the correct formula to calculate simple interest.

$SI = (PxxRxxT)/100$

P= principal (starting amount)
R= rate of interest as a % - hence the '100'
T = time period, given in years
SI = simple interest.

$A = amount = P+ SI$

Now just substitute in the given values and calculate.

$SI = (255 xx 5 xx 1)/100$

$SI =$12.75$