Question

Suppose you invest $500 into an account earning simple interest. The APR is 2% and you invest it for 5 years. Choose two answers: How much would your investment be worth at the end? What equation should you use to calculate this?

1a. $2500.10
2a. $550
3a. $1000
4a. $2550
5a. $5500
1b. A = 500 ( 1 + 2(5))
2b. A = 500 (1 + 0.2(5))
3b. A = 500 (1 + 0.02(5))

Answer 1

To calculate the total amount of the investment at the end, use the simple interest formula: A = P(1 + rt). Plug in the values of P, r, and t to find the answer.

Step-by-step explanation:

To calculate the total amount of the investment at the end, you can use the simple interest formula: A = P(1 + rt), where A is the total amount, P is the principal amount (in this case $500), r is the interest rate (2% or 0.02), and t is the time in years (5 years). Plugging in the values, we get A = 500(1 + 0.02(5)) = $550.

So, the correct answer choice is 2a. $550.

The equation to calculate the investment would be A = 500(1 + 0.02(5)).