Question

Jessica's grandparents gave her $2000 for college to put in a savings account until she starts college in four years. Her grandparents agreed to pay her an additional 7.5% simple interest on the $2000 for every year. How much extra money will her grandparents give her at the end of four years?

Answer 1

The correct answer to the following question will be "$600".

Explanation:

The given values are:

Principal, P = $2000

Rate of interest, r = 7.5%

After changing percentage into decimal, we get

r = 0.075

Time, t = 4

As we know,

`I = P* r* t`

On putting the given values in the above formula, we get

⇒
`= 2000* 0.075* 4`

⇒
`=600`