Question

5 Digit Lock: Camden's grandparents opened a savings account for him on his 5th birthday. They deposited $5000 in an account that had a simple interest rate of 6%. Camden leaves his money in the account for 18 years.

Answer 1

Interest: $5400, account value: $10400

Explanation:

To find the final value of the account of Camden, we can use the formula for the simple interest rate:

`I=Prt`

where

I is the interest

P is the principal

r is the interest rate

t is the time

In this problem:

P = $5000 is the principal amount

r = 6% = 0.06 is interest rate

t = 18 y is the time

Therefore, the interest accumulated after 18 years is

`I=(5000)(0.06)(18)=\$5400`

And so, the total value of the account after 18 years is:

`P' = P+I = 5000+5400 = \$10400`