A deposit of $7,912 is made into a new account that earns 5.75% simple interest. No additional deposits or withdrawals will be made for 2 years.

Which amount is closest to the balance in the account at the end of 2 years?



*Remember to use your STAAR Reference Sheet for support!

(1 point)
Responses

$9,732
$9,732

$7,924
$7,924

$8,822
$8,822

$8,848

1 answer

To calculate the balance in the account after 2 years with simple interest, we can use the formula for simple interest:

\[ A = P(1 + rt) \]

where:

  • \( A \) is the total amount after interest,
  • \( P \) is the principal amount (the initial deposit),
  • \( r \) is the rate of interest (in decimal form),
  • \( t \) is the time the money is invested or borrowed for (in years).

Given:

  • \( P = 7,912 \)
  • \( r = 5.75% = 0.0575 \)
  • \( t = 2 \)

Now, we can plug in the values:

\[ A = 7,912(1 + (0.0575 \times 2)) \] \[ A = 7,912(1 + 0.115) \] \[ A = 7,912(1.115) \] \[ A \approx 7,912 \times 1.115 \approx 8,818.78 \]

Rounding this to the nearest whole number gives approximately $8,819.

Looking at the options provided, the one closest to this amount is:

$8,822.