Olivia deposited $800 at her local credit union in a savings account at the rate of 6.2% paid as simple interest. She will earn

Question

3 years ago

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Olivia deposited $800 at her local credit union in a savings account at the rate of 6.2% paid as simple interest. She will earn

interest once a year for the next 7 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Olivia in 7 years?a. $1,147.20 b. $149.60 c. $1,218.88 d. $852.68

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1 answer:

svp [43] · Answer 1 · 2022-01-04T15:43:02+03:00

Answer:

a. $1,147.20

Explanation:

Simple interest means the same amount will be paid as interest per year.

We will use the following formula to solve for Olivia's interest after 7 years.

Interest = principal* interest rate* time

Principal= $800

Interest rate= 6.2%

Time= 7 years

Interest= 800* 0.062* 7

Interest= $347.20

So the total money owed to Olivia is = 800+ 347.20= $1,147.20