Question

Question 5Ginny has $10,000 in a savings account earning 4% simple interest annually. Ginny plans on savingthis money for a long time. Let's calculate Ginny's Total account balance in 20 years.a $18

Answer 1

ANSWER

$18,000

EXPLANATION

Ginny has $10,000 in a savings account.

The interest is 4% simple interest.

We want to calculate Ginny's total account balance after 20 years.

To do this, we will first caluclate the interest and then we will add it to the initial balance.

To calculate Simple Interest, we use:

$\text{Simple Interest = }\frac{P\cdot\text{ R }\cdot\text{ T}}{100}$

P = principal = $10000

R = rate = 4%

T = time = 20 years

Therefore:

$SI\text{ = }\frac{10000\cdot\text{ 4 }\cdot\text{ 20}}{100}\text{ = \ 8000}$

Therefore, her account balance after 20 years is:

Amount = $10000 + $8000 = $18,000