Question

Andrea has a savings account with $80 that earns 2% interest per

year, not compounded. How much money will she have in 10 years, to
nearest penny? (Give your answer in dollars)​

Answer 1

After 10 years, she will has $96 in her bank.

Explanation:

It is given that Andrea's saving account is $80 and earns 2% interest per year as a Simple Interest (Not Compounded). Using simple interest formula, Interest = (P×R×T)/100 where P is the principal, R is the interest rate and T is number of years :

`I = (p * r * t)/(100)`

P = $80

R = 2%

T = 10 years

`I = (80 * 2 * 10)/(100)`

`I = (1600)/(100)`

`I = 16`

It is given that the interest amount is $16. So the total amount she has after 10 years in the bank is $96 :

interest amount = $16

principal = $80

total = $16 + $80

= $96