Question

Jamie has invested $1500 in a savings account. Each month the account pays an interest of 3.8%. How much money will she have in her account 4 years later if she does not make any deposits or withdrawals (round to the nearest dollar)?

A) $1,257
B) $1,557
C) $1,559
D) $2,341

Answer 1

Use the formula I=PRT. P = Principal, R = Rate, and T= Time. In this case P = 1500, R = 3.8%, and T = 48 because 12 months in a year multiplied by 4 years. So at the end, I = 1500*3.8%*48. Then add the amount from the equation to her starting balance of 1500

Answer 2

$4236.

Explanation:

We have been given that Jamie has invested $1500 in a savings account. Each month the account pays an interest of 3.8%. We are asked to find the total amount Jamie will have in her account after 4 years.

We will use simple interest formula to solve our given problem.

`A=P(1+rt)`, where,

A = Final amount after t years,

P = Principal amount,

r = Interest rate in decimal form,

t = Number of years.

Let us convert our given rate in decimal form.

`3.8\%=(3.8)/(100)=0.038`

Since the we have been given monthly interest rate, so we will convert the given rate to annual interest rate by multiplying 0.038 by 12.

Upon substituting our given values in above formula we will get,

`A=\$1500(1+0.038*12*4)`

`A=\$1500(1+1.824)`

`A=\$1500(2.824)`

`A=\$4236`

Therefore, Jamie will have $4236 in her account after 4 years.