How do I work out the balance of a simple interest question?

Question

How do I solve this:

Find the balance of an account with $900 invested at a %3 simple interest rate for 4 years

It also mentions

[Hint: Principal + interest]

I don't know what that means either ...

Attempted solution:

I know the formula for a simple interest question is PSI, so in this case, PSI would be 900 X 3/100 X 4

Answer 1

For simple interest you can find the balance of an account by using the formula. B = P(1+rt). Here B is your balance, P is the amount you wish to invest, r is the rate and t is time. Given the info above, can you plug in the values to find this balance?

The question is dealt in years which is nice, sometimes you might have to deal with other forms of time such as months or weeks.

Your PSI is just the interest accumulated. So you could add the 900 to your accumulated interest which is 108, thus the total balance is 1008. Either way works fine for simple interest.