Question

Alyson deposits $500 in the bank for 12 years. The bank offers her a 4% simple interest rate. How much money will be in her account at the end of the 12 years? (Remember to round your answer to the nearest cent if necessary.)

Answer 1

We use the formula A = P(1 + rt), where A is the total amount in the account, P is the principal (the initial deposit), r is the interest rate, and t is the time in years.

In this case, Alyson deposits $500, so P = 500. The interest rate is 4%, so r = 0.04. The time is 12 years, so t = 12.

Using the formula, we have A = 500(1 + (0.04)(12))

= 500(1 + 0.48)

= 500(1.48)

= $740

Therefore, there will be $740 in Alyson's account at the end of the 12 years.