Question

Sharel has a savings account with $700 in it that earns 1% simple

interest per year.
How much money, to the nearest penny, will Sharel have in 8 years?
Give your answer in dollars.

Answer 1

$756

Explanation:

You want to know the value of a $700 savings account earning 1% simple interest after 8 years.

Value

The account value is given by the simple interest formula ...

A = P(1 +rt)

where P is the principal invested at rate r for t years.

A = $700(1 +0.01·8) = $700·1.08 = $756

Sharel will have $756 in 8 years.

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