In 16 years if her parents put in $1,000 and accrues 3.75% interest annually; in 16 years she will have $1,600 in the account.
To find this we need to multiply the amount deposited originally, by the annual percentage, by the amount of years in total.
We'll change the percentage into a decimal by moving the decimal two places to the right; which will change it to 0.0375.
Our equation will look like this:
1,000 x 0.0375 x 16
1,000 x 0.0375 = 37.50
37.50 x 16 = 600.
So, in 16 years at 3.75%, she will earn $600 in interest.
We'll add the interested of $600 to the original deposited amount of $1,000.
$1,000 + $600 = $1,600.
