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Lori deposited 390 into a savings account. She earns 5.8 interest each year. What will be her new balance after the first year?

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Final answer:

Lori will have a new balance of $412.62 in her savings account after the first year, having earned 5.8% interest on her $390 deposit.

Step-by-step explanation:

When Lori deposited $390 into a savings account with an annual interest rate of 5.8%, we can calculate her new balance after the first year using the formula for simple interest, which is A = P(1 + rt). Here, A represents the amount of money accumulated after n years, including interest. P is the principal amount (the initial amount of money), r is the annual interest rate (as a decimal), and t is the time in years.

Applying the values, we get:

  • P = $390
  • r = 5.8/100 = 0.058 (converting percentage to a decimal)
  • t = 1 year

The new balance A can be calculated as follows:

A = $390(1 + 0.058 × 1)

A = $390(1 + 0.058)

A = $390 × 1.058

A = $412.62

Lori's new balance after the first year will be $412.62.

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