Question

$800 is invested at a rate of 7%. What will be the total amount of the investment after 3 1/2 years?

Answer 1

Answer:

A = $996.00

Step-by-step explanation:

(I = A - P = $196.00)

Equation:

A = P(1 + rt)

Where:

A = Total Accrued Amount (principal + interest)

P = Principal Amount

I = Interest Amount

r = Rate of Interest per year in decimal; r = R/100

R = Rate of Interest per year as a percent; R = r * 100

t = Time Period involved in months or years

From the base formula, A = P(1 + rt) derived from A = P + I and I = Prt so A = P + I = P + Prt = P(1 + rt)

Calculation:

First, converting R percent to r a decimal

r = R/100 = 7%/100 = 0.07 per year.

Solving our equation:

A = 800(1 + (0.07 × 3.5)) = 996

A = $996.00

The total amount accrued, principal plus interest, from simple interest on a principal of $800.00 at a rate of 7% per year for 3.5 years is $996.00.