Question

chelsea deposits $600 into a bank account and is earning simple interest.After 4 years her account has a balance of $621.60.If Chelsea decides to put $1100 into the bank account instead of $600 how much would she have in her account after 7 years?

Answer 1

If she deposited $600 and had $621.60 after four years, then she earned: $621.60 - $600 = $21.60 in four years. It means in one year she earned $21.60 ÷ 4 = $5.40. Now we have to find out how many percent of $600 is $5.40:

$5.40 = x% from $600
5.4 = x/100 * 600
5.4 = 600x/100                 / * 100 (both sides)
540 = 600x                       / ÷ 600 (both sides)
x = 0.9

So the interest rate was 0.9% annually.

Now we have to find out how much is 0.9% from $1100:

$1100 * 0.9% =
= 1100 * 9/1009 =
= 9900/1000 =
= 9.9

It means in one year she would earn $9.90. After 7 years she would earn $9.90 * 7 = $69.30, so she would have in her account:

$1100 + $69.30 = $1169.30