Simple Interest
The interest rate for Lamar's savings account is 1% per year. This means his money earns 1% at the end of each year.
The formula to calculate the interest is:
I = P.r.t
Where P is the principal or initial saved amount, r is the interest rate, and t is the time.
P = $80,000
r = 1%. This must be converted to decimal
r = 1 / 100 = 0.01
t = 3 years
Calculate the interest:
I = 80,000*0.01*3
I = $2,400
That amount is added to the principal:
A = P + I
A = $80,000 + $2,400
A = $82,400
He will have $82,400 in 3 years
