document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1132773>Question 1132773</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A worker deposits the proceeds from a bonus in<BR>\n" );
document.write( "an account that earns an annual simple interest<BR>\n" );
document.write( "rate of 5%. The worker leaves the money in the<BR>\n" );
document.write( "account for 10 years without adding or withdrawing<BR>\n" );
document.write( "money. Is the amount of interest earned in the eighth<BR>\n" );
document.write( "year less than, equal to, or more than the amount of<BR>\n" );
document.write( "interest earned in the fourth year </SPAN>\n" );
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document.write( "With simple interest, the amount of interest is always based on the original amount.  So the amount of interest in each year is going to be the same.<br><BR>\n" );
document.write( "ANSWER: The amount of interest in the 8th year is equal to the amount of interest in the 4th year.<br><BR>\n" );
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document.write( "Added after seeing the response by tutor @MathTherapy....<br><BR>\n" );
document.write( "He apparently thinks he knows everything, because all his responses say \"accept no other answer\".  Unfortunately, his answers are not always right.<br><BR>\n" );
document.write( "Ignore his answer on this one; it is plain wrong.<br><BR>\n" );
document.write( "The situation he describes, where interest for a year is based on the total amount at the beginning of the year, is precisely what describes compound interest -- NOT simple interest.<br><BR>\n" );
document.write( "With compound interest, the amount of interest in each year is more than the interest in the preceding year.<br><BR>\n" );
document.write( "But your problem involves SIMPLE interest.<br><BR>\n" );
document.write( "The formula for the amount of simple interest is<br><BR>\n" );
document.write( "I = prt<br><BR>\n" );
document.write( "I = interest amount<BR>\n" );
document.write( "p = initial amount<BR>\n" );
document.write( "r = interest rate<BR>\n" );
document.write( "t = time (years)<br><BR>\n" );
document.write( "Let's look at a simple example -- $1000 with an interest rate of 10%.<br><BR>\n" );
document.write( "The interest earned in 3 years is  I = prt = ($1000)(.10)(3) = $300<br><BR>\n" );
document.write( "The interest earned in 4 years is  I = prt = ($1000)(.10)(4) = $400<br><BR>\n" );
document.write( "The interest earned IN THE 4TH YEAR is $400-$300 = $100.<br><BR>\n" );
document.write( "The interest earned in 7 years is  I = prt = ($1000)(.10)(7) = $700<br><BR>\n" );
document.write( "The interest earned in 8 years is  I = prt = ($1000)(.10)(8) = $800<br><BR>\n" );
document.write( "The interest earned IN THE 4TH YEAR is $800-$700 = $100.<br><BR>\n" );
document.write( "The interest earned in the 8th year is THE SAME AS the interest earned in the 4th year. </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );