The interest earned after 3 years is $45 and the balance in your account after 3 years is $545.
What is simple interest?
It is defined as the interest on the based on the principal amount, it does not include the compounded amount. The interest calculate on the initial amount or borrowed amount.
We know the formula for the simple interest:
A = P(1 + rt)
We have principal amount p = $500
rate of simple interest = 3% = 0.03
Time t = 3 years
Balance in bank account after 3 years A is:
A = 500(1+0.03×3)
A = 500×1.09
A = $545
Interest = 545-500 = $45
Thus, the interest earned after 3 years is $45 and the balance in your account after 3 years is $545.
Learn more about the simple interest here:
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