Question

A bank offers a 3.7% annual interest rate for a retirement savings account. A worker puts $8,000 into the account. How much will be in the account after a year?

Answer 1

$8,296

Explanation:

(see attached for reference)

assuming simple interest, the final amount is given by

A = P(1 + rt), where

A = final amount (we are asked to find this)

P = principal amount = given as $8000

r = rate = 3.7% = 0.037

t = time = 1 year

substituting the known values into the formula,

A = P(1 + rt)

= 8,000 [ 1 + (0.037)(1) ]

= $8,296