Question

Seth worked a summer job at a camp. His salary accumulated all summer and at the end of the summer he deposited $1890 in a savings account at 3.5 percent interest for 2.5 years. What was the total amount of money in the account at the end of this time?

Answer 1

Answer:

Total amount= $2,055.38

Explanation:

Simple interest is defined as the amount that a lender charges the borrower for the funds collected. The borrower pays back the principal collected and the interest to the lender.

Simple interest is calculated as principal multiplied by time multiplied by interest rate.

Interest= principal * time * rate

Interest= 1,890* 2.5* 0.035

Interest= $165.375

Therefore total amount of money in the account is

Total amount= principal + Interest

Total amount= 1890+ 165.375

Total amount= $2,055.375~ $2,055.38

Answer 2

Answer:

$2,059.74

Explanation:

we can use the future value formula to determine the amount of money Seth will have on his savings account:

future value = present value x (1 + r)ⁿ

• present value = $1,890
• r = 3.5%
• n = 2.5 years

future value = $1,890 x (1 + 3.5%)²°⁵ = $1,890 x 1.035²°⁵ = $1,890 x 1.0898 = $2,059.74