Yaritza invests money in an account paying a simple interest of 8% per year. If no money will be added or removed from the investment, what should she multiply her current balance by to find her total balance in a year in one step?

Answer 1

To find the total balance in a year with simple interest, you first need to determine how interest affects the investment over the year.

If the interest rate is 8%, this means that after one year, the total amount Yaritza will have is equal to her current balance plus 8% of that balance. This can be represented as:

\[ \text{Total Balance} = \text{Current Balance} + (0.08 \times \text{Current Balance}) \]

Factoring out the Current Balance gives:

\[ \text{Total Balance} = \text{Current Balance} \times (1 + 0.08) = \text{Current Balance} \times 1.08 \]

So, to find her total balance in a year in one step, Yaritza should multiply her current balance by 1.08.