Question

Sophia has $17,250 in a savings account that earns 11% annually. The interest is not compounded. How much will she have in 4 years?

Answer 1

To determine how much she will have in her account after 4 years you have to calculate the simple interest using the following formula:

`A=P\mleft(1+rt\mright)`

Where

A: total amount accured

P: principal investment

r: interest rate → you have to express it as a decimal number not as a percentage

t: time of the invesment → normally expressed in years

For

P= $17.250

r=11%→ 11/100=0.11

t=4years

The simple interest will be

`\begin{gathered} A=17250(1+0.11\cdot4) \\ A=17250(1+0.44) \\ A=17250\cdot1.44 \\ A=24840 \end{gathered}`