Question

Tyler Savion counts pays a simple annual interest rate of 3.25%. He deposits $5000 in his account and makes some additional deposits or withdrawals for three years. What will the total value of the account be after three years?

A) $5120.75
B) $5140.00
C) $4875.00
D) $5253.75

Answer 1

The total value of the account after three years would be $5487.50.

Step-by-step explanation:

To calculate the total value of the account after three years with the given interest rate of 3.25%, we need to use the formula for calculating simple interest:

Simple Interest = Principal x Rate x Time

For the initial deposit of $5000, the simple interest for three years would be:

Simple Interest = $5000 x 0.0325 x 3 = $487.50

To find the total value of the account, we add the simple interest to the principal:

Total Value = Principal + Simple Interest = $5000 + $487.50 = $5487.50

Therefore, the total value of the account after three years would be $5487.50.