Question

Bill invests $8,891 into a simple interest account that yields 3.65% interest annually. How much totalmoney will Bill have in the account after 26 years?Round answers to the nearest cent (2 decimal places).

Answer 1

We would apply the frmula for determining simple interest which is expressd as

I = (PRT)/100

Where

I = interest

P = principal or amount invested

R = Interest rate

T = time in years

From the information given,

P = 8891

R = 3.65%

T = 26

Interest = (8891 * 3.65 * 26)/100 = 8437.559

The total amount that Bill would pay after 26 years would be the sum of the capital and the interest

Total amount = 8891 + 8437.559 = 17328.559

Rounding to the rearest cent(2 decimal places),

Total amount = $17328.60