Question

You invest $1400 in an account at 2% per year simple interest. The equation that represents this scenario is a(n)=1400+(n-1)(0.02•1400) How much will you have in the account in year 7? Round your answer to the nearest dollar

Answer 1

$1568

Explanation:

Given the account value in year n is a(n) = 1400 +(n -1)(0.02·1400), you want the account value in year 7.

Function value

Using 7 for n, we have ...

a(7) = 1400 +(7 -1)(0.02·1400) = 1400 +6(28) = 1568

In year 7 you will have $1568.

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Additional comment

The given equation is a bit unusual. It tells you the value in the first year is $1400, the second year: $1428, increasing by $28 each year. Often, interest rate problems ask for a value after some number of years. That's not what the given equation tells you.

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