Question

Paloma opened a savings account with a deposit of $750 She earns 2% simple interest per year on the account What will be the total amount of money, in dollars in Paloma's account after 1 year if there are no other deposits or withdrawals?

Answer 1

The formular for finding the amount on a simple interest given the principal, the time, and rate is

`A=P(1+(RT)/(100))`

The given Principal, P=$750; Rate, R=2%; Time, T= 1year

Substituting the given parameters in the formula to calculate the Amount A

`\begin{gathered} A=750(1+(2*1)/(100)) \\ A=750(1+0.2) \\ A=750(1.2) \\ A=\text{ \$900} \end{gathered}`

Hence, the amount of money in dollars in Paloma's account after 1 year is $900