Sylvia deposits $50 into a savings account with a 2% interest rate. Using the formula for simple interest, how much will she have in the account in 5 years?

Question

A
$55.00

B
$45.00

C
$60.00

D
$550.00

Answer 1

To calculate the amount Sylvia will have in her savings account after 5 years with a simple interest formula, we can use the formula:

\[ A = P + I \]

where:

• \( A \) is the total amount in the account after time \( t \)
• \( P \) is the principal amount (initial deposit)
• \( I \) is the interest earned

The interest \( I \) can be calculated using the formula:

\[ I = P \times r \times t \]

where:

• \( r \) is the interest rate (as a decimal)
• \( t \) is the time in years

Given:

• \( P = 50 \)
• \( r = 0.02 \)
• \( t = 5 \)

Now, we can calculate the interest:

\[ I = 50 \times 0.02 \times 5 = 50 \times 0.1 = 5 \]

Now, we can calculate the total amount in the account:

\[ A = P + I = 50 + 5 = 55 \]

Thus, after 5 years, Sylvia will have $55.00 in her account.

The correct answer is A) $55.00.