Question

Chelsea deposits $600.00 into a bank account and is earning simple interest from the bank. After 4 years, her account has a balance of $621.60. Chelsea decided to put $1,100.00 into the account instead of $600.00, how much would she have after 7 years? Explain.

Answer 1

If she deposited $600 and had $621.60 after four years, then she earned: $621.60 - $600 = $21.60 in four years. It means in one year she earned $21.60 ÷ 4 = $5.40. Now we have to find out how many percent of $600 is $5.40:

$5.40 = x% from $600
5.4 = x/100 * 600
5.4 = 600x/100                 / * 100 (both sides)
540 = 600x                       / ÷ 600 (both sides)
x = 0.9

So the interest rate was 0.9% annually.

Now we have to find out how much is 0.9% from $1100:

$1100 * 0.9% =
= 1100 * 9/1009 =
= 9900/1000 =
= 9.9

It means in one year she would earn $9.90. After 7 years she would earn $9.90 * 7 = $69.30, so she would have in her account:

$1100 + $69.30 = $1169.30


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Answer 2

Answer:

Step-by-step explanation:

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest paid on the amount deposited.

P represents the principal or amount deposited.

R represents interest rate

T represents the duration in years.

Considering the first instance, we would determine the interest rate.

From the information given,

P = $600.00

T = 4 years

I = 621.60 - 600 = $21.60

Therefore,

21.6 = (600 × R × 4)/100

21.6 = 24R

R = 21.6/24

R = 0.9%

She decided to put $1,100.00 into the account. Therefore

P = $1100.00

R = 0.9%

T = 7 years

Therefore,

I = (1100 × 0.9 × 7)/100

I = 69.3

The amount that she would have after 7 years is

1100 + 69.3 = $1169.3