Question

deposited $500 into a savings account. After 30 months took the money out of the account. If the interest rate that earned on her money was 12% simple interest, find the future value.

Answer 1

The future value of the savings account after 30 months can be found using the simple interest formula.

Step-by-step explanation:

To find the future value of the savings account, we can use the formula for simple interest. The formula is: FV = P(1 + rt), where FV is the future value, P is the principal (initial deposit), r is the interest rate per period, and t is the number of periods. In this case, the principal is $500, the interest rate is 12% (0.12), and the number of periods is 30 months (2.5 years).

Substituting the values into the formula, we get: FV = $500(1 + 0.12 * 2.5) = $500(1.3) = $650.

Therefore, the future value of the savings account after 30 months is $650.