Question

2. Amy deposits $100 into an account that earns simple interest at an annual rate of 8%. How much will be in her account after 5 years? *

Answer 1

$140

Explanation:

We can use the simple interest formula for this:

`A = P (1 + rt)`

P = initial balance

r = annual interest rate

t = time

First, change 8% into its decimal form:

8% ->
`(8)/(100)` -> 0.08

Now, lets plug in the values:

`A=100(1+(0.08)(5))`

`A=140`

Amy will have $140 in her account after 5 years.