Need help setting up the problem: If you deposited $800 into a savings account with an interest rate of 3.8%, what will be your balance at the end of 1 year. I was thinking the overall answer is 830.40 but you are supposed to use a percent equation and a proportion equation. I don't know how to do that in this situation. Thanks..

Question

Need help setting up the problem:  If you deposited $800 into a savings account with an interest rate of 3.8%, what will be your balance at the end of 1 year.  I was thinking the overall answer is 830.40 but you are supposed to use a percent equation and a proportion equation.  I don't know how to do that in this situation.  Thanks..

Henry · Answer

Compounded Annually: P = Po(1+r)^n. n = 1Comp/yr * 1yr = 1. P = 800(1.038)^1 = $830.40 Simple Int. P = P + Po*r*t = 800 + 800*0.038*1= $830.40.