Question

If \$1000 is deposited into an account that earns 3.25\% simple interest per year, how much money will be in the account after 7 years? PLEASE SHHOW WORK

Answer 1

Answer: 1227.50 dollars

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Explanation:

The simple interest formula to use is

A = P*(1+r*t)

where,

A = account value after t years (original deposit + interest)

P = 1000 = amount deposited (principal)

r = 0.0325 = annual interest rate in decimal form

t = 7 = number of years

So,

A = P*(1+r*t)

A = 1000*(1+0.0325*7)

A = 1227.50

Side note: you've earned A-P = 1227.50-1000 = 277.50 dollars in total interest