Question

When Jacoby was born, his grandparents put $2,500 into a savings account for college. It earned 11% interest per year. Find the total after 18 years. Remember to find the simple interest first, then add that to the original amount.

Answer 1

To calculate the total in the savings account after 18 years at 11% simple interest, you first find the interest earned ($4,950) and then add it to the original amount ($2,500), resulting in a total of $7,450.

Step-by-step explanation:

The question asks to calculate the total amount in a savings account after 18 years when $2,500 is invested at an 11% simple interest rate. To find the simple interest, we use the formula Simple Interest (SI) = Principal (P) × Rate (R) × Time (T). Here the principal (P) is $2,500, the rate (R) of interest is 11% or 0.11 when expressed as a decimal, and the time (T) is 18 years.

First Step: Calculate the simple interest.
SI = 2500 × 0.11 × 18 = $4,950

Second Step: Add the simple interest to the principal to get the total amount.
Total Amount = Principal + Simple Interest
Total Amount = $2,500 + $4,950 = $7,450