Question

Dorothy opens a savings account with $80 that earns 8.5% interest

per year, not compounded.
How much money, to the nearest penny, will Dorothy have in 1 year?
Give your answer in dollars.

Answer 1

$86.8

Explanation:

Given that,

Principal, P = $80

Rate of interest, R = 8.5%

We need to find the money he will have in 1 year. As the interest is not compounded, it must be simple interest. The simple interest can be calculated by the formula,

`I=(PRT)/(100)\\\\I=(80* 8.5* 1)/(100)\\\\=\$ 6.8`

We know that,

Amount = Principal + interest

= $80 + $6.8

= $86.8

Hence, the amount will become $86.8.