Question

Question

Sami's savings account earns 4% simple interest. If Sami starts with $500 in her account, how much money will she have in
her account after four years?

Answer 1

Explanation:

First, we express the annual interest rate r, in decimal form. Since it is 4%, the interest rate is

r=4%=4100=0.04.

The principal P=500, so the future value is

A=P(1+rt)=500(1+(0.04)(4))=$580.

Answer 2

$584.92928

Explanation:

If Sami starts with $500 and earns 4% and she doesnt take away any money, the equation would be:

y=500(1.04)^x

y being dollars and x in years

if we replace x with 4, the answers come out to be 584.92928