Question

Kirsten invested $1800 in an account paying 2% simple interest. What was her account balance after 5 years?

Answer 1

$1,980

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 2% into its decimal form:

2% ->
`(2)/(100)` -> 0.02

Now, lets plug the values into the equation:

`A=1,800(1+(0.02)(5))`

`A=1,980`

The account balance after 5 years is $1,980