Question

Ms. Anderson deposits $700 into a savings account that pays a simple interest of 2% per year. Which of the following would be the total amount in her savings account at the end of 10 years?

A) $140
B) $14,000
C) $840
D) $14,700

Answer 1

Ms. Anderson would have $840 in her savings account after 10 years, given a simple interest rate of 2% per year on her initial $700 deposit. The correct answer is option C.

Step-by-step explanation:

Total Amount in Savings Account After 10 Years

Ms. Anderson deposits $700 into a savings account offering a simple interest rate of 2% per year. To calculate the total amount in her account at the end of 10 years, we can use the formula for simple interest:

Total amount = Principal + (Principal × Interest Rate × Time)

where Principal is the initial amount deposited ($700), Interest Rate is the annual interest rate (2% or 0.02), and Time is the number of years (10).

Now, let's calculate:

• 
  
• Total interest earned over 10 years: $700 × 0.02 × 10 = $140
• 
  
• Total amount after 10 years: $700 (Principal) + $140 (Interest) = $840

Therefore, option C ($840) would be the correct answer.