Question

Susan opened a savings account with $750 at 2.9 percent annual interest. If she keeps the money in the account for 2 years, what is the total amount in the account?

Answer 1

Answer:

The answer is $793.50

Explanation:

To solve this, we will use the annual interest formula for simple interest, which is:

A = P(1 + rt)

Where:

• A is the final amount including principal
• P is the principal amount = $750
• r is the rate per year = 2.9% or 0.029 (that is 2.9 divided by 100)
• t is the number of years = 2 years

Next, we input these into the equation as follows:

A = 750(1 + 0.029 x 2)

A = 750(1 + 0.058)

A = 750(1.058)

A = 793.5

Therefore, Susan earns $793.50