Question

Charles deposits $100 in a savings account at 12 percent interest. How much will Charles have in 7 years?

Answer 1

Charles will have $184 in 7 years.

Solution:

Given,

Initial deposit: $100 (P)

Interest percentage: 12% (I)

Total number of years: 7 (T)

To find,

Amount after 7 years (A)

Formula,

$A=P(1+r t) \rightarrow(1)$

First, converting 12 percent to a decimal , we get

$r = \frac{R}{100} = \frac{12}{100} = 0.12 \text{ per year}.$

Substituting the values in equation (1) we get,

$A = 100(1 + (0.12\times7)) = 184$

A = $184.00

The total amount accrued, principal plus interest, from simple interest on a principal of $100.00 at a rate of 12% per year for 7 years is $184.00.