Question

You are 10 years old and have $500 to put in the bank to save for college. You will earn 5% simple interest rate. If you leave it in the bank for 10 years, what will be the balance?

Answer 1

$814.48

Explanation:

Use the formula for simple interest: B=P(1+r)^t

Plug in values: B=500(1+.05)^10

Evaluate: B=814.48

So the balance after 10 years will be around $814.48