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

The total amount in the savings account after 18 years with an 11% simple interest rate is $7,450. This is calculated by first finding the simple interest ($4,950) using the formula I = PRT and then adding it to the original amount ($2,500).

Step-by-step explanation:

The student's question involves finding the total amount of money accumulated in a savings account after 18 years with a given simple interest rate. To calculate the total amount, we need to first determine the simple interest earned over the 18 years. The formula for simple interest is I = PRT, where I is the interest earned, P is the principal amount (initial investment), R is the annual interest rate (as a decimal), and T is the time in years.

For Jacoby's grandparents' investment:

• P = $2,500
• R = 11% or 0.11
• T = 18 years

Using the simple interest formula:

I = PRT = $2,500 × 0.11 × 18 = $4,950

Now, we add the interest to the original principal to find the total:

Total = Principal + Interest = $2,500 + $4,950 = $7,450

Therefore, after 18 years, the total amount in the savings account will be $7,450 if the interest earned is simple interest.