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$250 is invested at a bank that pays 7% simple interest. Calculate the amount of money in the account after 1 year, 3 years, 7 years, and 20 years.

Respuesta :

Answer:

Year 1: $267.50

Year 2: $305.20

Year 7: $372.50

Year 20: $600.00

Step-by-step explanation:

A = P(1 + rt)  A is the interest and principal (your answer).  P is the initial amount invested. r is the interest rate and t is the time.

After Year 1:

A = 250[1 + (.07)(1)]

A = 250(1 + .07)

A = 250(1.07)

A = 268.5

After Year 3:

A = 250[1 + (.07)(3)]

A = 250(1 + .21)

A = 250(1.21)

A = 302.5

After 7 Years:

A = 250[1 + (.07)(7)]

A = 250(1 + .49)

A = 250(1.49)

A = 372.5

After 20 years:

A = 250[1 + (.07)(20)]

A = 250(1 + 1.4)

A = 250(2.4)

A = 600

semsee45

Answer:

1 year = $267.50

3 years = $302.50

7 years = $372.50

20 years = $600

Step-by-step explanation:

Simple Interest Formula

A = P(1 + rt)

where:

  • A = final amount
  • P = principal
  • r = interest rate (in decimal form)
  • t = time (in years)

Given:

  • P = $250
  • r = 7% = 0.07

Substitute the given values along with the specified values of t into the formula and solve for A.

Account Balance after 1 year

⇒ A = 250(1 + 0.07(1))

⇒ A = 250(1.07)

⇒ A = $267.50

Account Balance after 3 years

⇒ A = 250(1 + 0.07(3))

⇒ A = 250(1 + 0.21)

⇒ A = 250(1.21)

⇒ A = $302.50

Account Balance after 7 years

⇒ A = 250(1 + 0.07(7))

⇒ A = 250(1 + 0.49)

⇒ A = 250(1.49)

⇒ A = $372.50

Account Balance after 20 years

⇒ A = 250(1 + 0.07(20))

⇒ A = 250(1 + 1.4)

⇒ A = 250(2.4)

⇒ A = $600

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