Question

Hannah invested $1600 in an account that pays 4.25% interest compounded

annually. Assuming no deposits or withdrawals are made, find how much
money Hannah would have in the account 12 years after her initial investment. Round to the
nearest tenth (if necessary).

Answer 1

$2416

Explanation:

First, converting R percent to r a decimal

r = R/100 = 4.25%/100 = 0.0425 per year,

then, solving our equation

I = 1600 × 0.0425 × 12 = 816

I = $ 816.00

The simple interest accumulated

on a principal of $ 1,600.00

at a rate of 4.25% per year

for 12 years is $ 816.00.