Question

5. Olivia is trying to save money to buy a car.
This summer she earned $500 babysitting
and put that money into a savings account,
which earns 2% simple interest. How much
total money will she have in her account
after 3 years?​

Answer 1

The total money in her account after 3 years will be $530

Explanation:

The Simple Interest Equation (Principal + Interest) , is given by the following equation:

$A = P(1 + rt)$

Where:

A = Total Accrued Amount (principal + interest)

P = Principal Amount

I = Interest Amount  (Prt)

r = Rate of Interest per year in decimal

t = Time Period involved in months or years

So here:

$P=500 \\ \\ r=2\%=\frac{2}{100}=0.02 \\ \\ t=3$

Substituting values:

$A = P(1 + rt) \\ \\ A=500(1+0.02\times 3) \\ \\ A=530$

Finally, the total money in her account after 3 years will be $530