Question

Bonnie deposits $70.00 into a new savings account.

• The account earns 4.5% simple interest per year.
• No money is added or removed from the savings account for 3 years.
What is the total amount of money in her savings account at the end of the 3 years?

A. $9.45
B. $79.45
C. $94.50
D. $164.50

Answer 1

B. $79.45

Explanation:

The equation for simple interest is I = PRT, where I = interest earned, P = principal/amount invested, R = rate as a decimal, and T = time in years.

For this example, we'll calculate the interest earned, then add to the principal to get the total amount of money in her account.

I = (70)(0.045)(3)

I = 9.45

70 + 9.45 = $79.45

Please let me know if you have questions.