Business and Finance Algebra question?

Question

Paul invested $5000 in a time deposit. What interest will he earn for 1 year if the interst rate is 6.5%? Identify the rate, base and amount in this problem.

Answer 1

well, first you identify the principle amout which is $5000, next you identify the rate, which is 6.5%, and now you do some math. convert 6.5% into a decimal, which is .065. now multiply 5,000 to .065, which is 325. $325 is the amount of interest that the account will gather over one year. so add this to 5,000 and you have you answer of the amount which is $5,325.