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Kremena's bank account earns 4.5% simple interest. How much must she deposit in the account today if she wants it to be worth $1,250 in 3 years

User Askmike
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1 Answer

27 votes
27 votes

Answer:

$1,101.32

Step-by-step explanation:

Simple interest accounts balances are calculated using the following formula

A = P ( 1 + rt)

where:

A = final account balance

P = starting balance

r = interest rate (annually) percentage divided by 100

t = years

Therefore, we can plug in the values provided in this formula and solve for P which would be the amount that Kremena needs to deposit.

1,250 = P ( 1 + (0.045 * 3))

1,250 = P * 1.135 ... divide both sides by 1.135

1,101.32 = P

Finally, we can see that Kremena would need to deposit a total of $1,101.32 to have the amount that she wants after 3 years.

User Arbrcr
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