Question

Heather deposited $1,700 at her local credit union in a savings account at the rate of 9.8% paid as simple interest. She will earn interest once a year for the next 13 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Heather in 13 years?

Answer 1

Answer:= $3,865.80

Step-by-step explanation:

alculate the future value (FV) of the investment in 13 years as follows:

I = Interest Earned in One Year x Number of Years

= (9.8% x $1,700.00) per year x 13 years

= $2,165.80

FV n = Initial Investment (PV 0 ) + Total Interest Earned (I)

FV 13 = $1,700.00 + $2,165.80

= $3,865.80

Answer 2

Answer: $3865.8

Step-by-step explanation:

The formula to find the simple interest is given by :-

`I=Prt`, where P is the initial amount deposited , r is the rate of interest in decimal and t is the time period in years.

Given : P= $1700 ; r= 9.8%=0.098 ; t=13 years

Then , the simple interest earned in 13 years will be :-

`I=1700*0.098*13=2165.8`

Now, the combined amount = P+I =$1700+$2165.8= $3865.8

Hence, the credit union would owe Heather $3865.8 in 13 years.