Question

Nicole and her sister each invest $500 in a bank account that earns an annual interest rate of 4%. If y represents the total amount of money in the account and t represents the time in years since they invested in the account, which equation represents this situation?

Answer 1

Answer:

y = $(500+20t)

Step-by-step explanation:

In this question, we are asked to give an equation that calculates the amount y a savings of $500 would have yielded after a period of t years at an annual rate of 4% per annum.

This looks quite straightforward! Let’s crack it!

Now, the amount y after t years is simply the initial savings plus the interest on the savings.

This means mathematically we should have a representation like;

y = $500 + SI

Where SI is the simple interest. Now, let’s calculate the SI with the information at our disposal.

Mathematically SI = PRT/100

where P is the initial amount saved called principal and has a value of $500 in this question

R is the rate and that is 4%

T is time and that is t years

Substituting these parameters in the equation, we have

SI = (500 * 4 * t)/100 = 20t

The amount y after t years is thus:

y = $500 + $20t or simply y = $(500+20t)