Question

Suppose that $1450 is deposited into an account paying simple interest of 8% annually. At the end of seven (7) years, the account will be worth _____________

Answer 1

After 7 years, an account with a $1450 deposit and a simple interest rate of 8% annually will be worth $2262.

Step-by-step explanation:

To calculate the future value of an account with simple interest, you use the formula total future amount = principal + (principal × interest rate × time), where the principal is the initial amount deposited, the interest rate is the annual simple interest rate (in decimal form), and time is the number of years the money is invested.

For the given problem, the principal is $1450, the interest rate is 8% (or 0.08 when expressed as a decimal), and the time is 7 years. Applying the formula, we have:

Total future amount = $1450 + ($1450 × 0.08 × 7) = $1450 + ($1450 × 0.56) = $1450 + $812 = $2262.

Therefore, after 7 years, the account will be worth $2262.

Answer 2

Total worth= $2,262

Step-by-step explanation:

Simple interest is the amount charged on a loan or the interest a person gets for keeping his money in the bank, it is a fixed percentage over a period of time.

The simple interest formula is given by

Interest = Principal* Interest rate* Time in years

Interest= 8%= 0.08

Principal = $1,450

Time = 7 years

Interest = 1,450* 0.08* 7

Interest= $812 earned in 7 years

The total worth of the account will.be the principal plus the interest earned

Total worth= 1,450+ 812

Total worth= $2,262