Question

Alvarez has $650 deposited into his bank account. The account earns simple interest of 5. 5% per year. No other money is added or withdrawn from the account for a period of four years. What is the total amount of money in the account after four years?

Answer 1

$793

Explanation:

The amount of money in an account earning simple interest is given by the formula ...

A = P(1 +rt)

where P is the principal invested at rate r for t years.

__

Using the values given in the problem statement, the account balance can be found to be ...

A = $650(1 +0.055×4) = $650×1.22 = $793

There will be $793 in the account after 4 years.