Question

Heather deposited $1,700 at her local credit union in a savings account at the rate of 9.8% paid as simple interest. She will earn interest once a year for the next 13 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Heather in 13 years?

Answer 1

Answer:  $3865.8

Explanation:

The formula to find the simple interest is given by :-

$I=Prt$, where P is the initial amount deposited , r is the rate of interest in decimal and t is the time period in years.

Given : P= $1700      ;    r= 9.8%=0.098     ; t=13 years

Then , the simple interest earned in 13 years will be :-

$I=1700\times0.098\times13=2165.8$

Now, the combined amount = P+I =$1700+$2165.8= $3865.8

Hence, the credit union would owe Heather $3865.8 in 13 years.