Question

Money in a savings particular savings account increases by about 6% after a year. How much money will be in the account after one year if the initial amount is $125?

Answer 1

Answer:

$132.5

Explanation:

To solve the given problem, we'll use the simple interest formula;

$A=P(1+rt)$

where A = the future amount

P = the initial amount invested = $125

r = interest rate in decimal = 6% = 6/100 = 0.06

t = time in years = 1 year

Let's go ahead and substitute the above into our equation and solve for A;

$\begin{gathered} A=125(1+0.6\ast1) \\ =125(1.06)_{} \\ \therefore A=132.5 \end{gathered}$

So $132.5 will be in the account after one year.