Question

Margarito opened a savings account with a $500 deposit and a simple interest rate of 5.6%. If there were no deposits or withdrawals, how much total money is in the account after 8 ½ years ?

Answer 1

Hey there!

Simple interest is based on only the original deposit of money, which in this case is $500.

To find 5.6% of 500, we can multiply it by the decimal that represents that part of a whole: 0.056.

$500 \times 0.056 = 28$

The question asks for how much money is in the account after 8 1/2 years. This means we multiply the interest for 1 year (28) by 8 1/2.

$28 \times 8.5 = 238$

Lastly, we add the interest to the original deposit.

$500 + 238 = 738$

The answer is $738.

Hope this helps!