Question

If $22 is invested at a simple interest rate of 2% per year, what would the total account balance be after forty years?

Answer 1

In this case, we'll have to carry out several steps to find the solution.

Step 01:

data:

principal = $22

rate = 2%

time = 40 years

Step 02:

simple interest:

annually

rate = 2% = 2 / 100 = 0.02

Amount:

A = P (1 + rt)

A = $22 (1 + 0.02 * 40)

A = $22 (1.8)

A = $39.6

The answer is:

total account balance = $39.6