Question

Jody borrows $700 from her credit union and agrees to repay them that amount + 2.56% simple annual interest accumulated over 2 years. How much will she return to the credit union at the end of 2 years?

A) $700
B) $717.12
C) $715.36
D) $728.00

Answer 1

Jody must return a total of $735.84 to the credit union after 2 years when the simple interest is calculated, which is not reflected in the provided options. This suggests the options may contain a typo or a miscalculation.

Step-by-step explanation:

To determine how much Jody will have to repay the credit union at the end of 2 years, we need to calculate the simple interest and then add it to the principal amount of $700.

The formula for calculating simple interest is I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.

In this case:

• Principal (P) = $700
• Rate (R) = 2.56% or 0.0256 when converted to decimal
• Time (T) = 2 years

Using the simple interest formula:

I = $700 × 0.0256 × 2 = $35.84

To find the total amount to be repaid, we add the interest to the principal:

Total Repayment = Principal + Interest = $700 + $35.84 = $735.84

The closest answer choice to this value is $735.84, which is not listed among the provided options, suggesting there may have been a miscalculation or a typo in the options.