Question

14. Rhonda invested $5000 in an interest bearing account which earns 2.5% annually. How

much will be in her account in 4 years?
What decimal value is
used for the "b" value in this example?​

Answer 1

`\$5,500`

see the explanation

Explanation:

we know that

The simple interest formula is equal to

`A=P(1+rt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=4\ years\\ P=\$5,000\\r=2.5\%=2.5/100=0.025`

substitute in the formula above

`A=5,000(1+0.025*4)`

`A=5,000(1+0,10)`

`A=5,000(1,10)`

`A=\$5,500`