Question

Sally deposits $2,500 at 8% interest for 3 years . How much can she withdraw at the end of that period

Answer 1

$3100

Step-by-step explanation

Sally deposits $2500 at 8% interest for 3 years.

We want to find the amount she can withdraw at the end of the period.

To know this, we have to first find the interest.

Simple Interest is given as:

`\begin{gathered} SI\text{ = }\frac{P\cdot\text{ R }\cdot\text{ T}}{100} \\ \text{where P = principal = \$2500} \\ R\text{ = rate = 8\%} \\ T\text{ = 3 years} \end{gathered}`

Therefore:

`\begin{gathered} SI\text{ = }\frac{2500\cdot\text{ 8 }\cdot\text{ 3}}{100} \\ SI\text{ = }(60000)/(100) \\ SI\text{ = \$600} \end{gathered}`

Therefore, after 3 years the interest will be $600.

The amount she can withdraw after this period is therefore the sum of the principal and the interest:

$2500 + $600 = $3100

She can withdraw $3100 at the end of the period.