Question

Question 22 of 25 At the beginning of year 1, Gracie invests $350 at an annual simple interest rate of 4%. She makes no deposits to or withdrawals from the account. Which explicit formula can be used to find the account's balance at the beginning of year 12? What is the balance?

Answer 1

1) Gathering the data

Investment: $ 350

Annual Simple Interest: 4%

Period: 12 years

2) Since it is a simple interest formula, then we can write the following:

`\begin{gathered} A=P(1+in) \\ A=350(1+0.04*12) \\ A=350+168 \\ A=518 \\ \end{gathered}`

Writing it out as an explicit formula, just replace the period by

`\begin{gathered} A=350(1+0.04n) \\ A=350\text{ +350}*0.04n \\ \end{gathered}`

Hence, the answer is A