Question

Justine received a bonus check from her work for $6000. She is going to deposit the money into her bank account that receives 5% simple interest. The account balance after year 5 is
$4,500
$7,500
$6,300

Answer 1

Assuming the inteest is annual, since it's simple that means we just have to analyze:

$A=P(1+r)^t$, where r is our interest rate as a decimal, t is time, p is our principal investment and A is our ending value. So, in the context of our problem this becomes:

$A=6000(1.05)^5$, which when evaluated by our trusty calculator becomes:

7657.68938,

which is rounded to 7500 in the problem.