Question

Sergio is creating a college fund for his son Diego, who is now 4 years old. Sergio put $1600 in a CD that will earn 8.25% simple interest. How much will be in the account when Diego turns 18?

Answer 1

well, Diego is 4 now, so by his 18th birthday that'll be 14 years later.

$~~~~~~ \textit{Simple Interest Earned Amount} \\\\ A=P(1+rt)\qquad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill & \ 1600\\ r=rate\to 8.25\%\to \frac{8.25}{100}\dotfill &0.0825\\ t=years\dotfill &14 \end{cases} \\\\\\ A=1600[1+(0.0825)(14)]\implies A=1600(2.155)\implies A=3448$