Question

When you are born, your parents deposited $500 into a simple interest account that
earns 2.5% annually. How much money would be in the account, for you, when you
turn 30 years old?

Answer 1

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Answer:

  $875

Step-by-step explanation:

The account pays simple interest, so the formula for the balance is ...

  A = P(1 +rt)

  A = $500(1 +0.025×30) = $500(1.75) = $875

There will be $875 in the account at age 30.