Question

Sean used the $1,200 he got from his graduation party to open a savings account. If the account earns 1% interest each month and he makes no additional deposits, how much money will be in the account in 5 years?

Answer 1

Answer:

$\ 1,920$

Step-by-step explanation:

we know that

The simple interest formula is equal to

$A=P(1+rt)$

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest  

t is Number of Time Periods

in this problem we have

$t=5*12=60\ months\\ P=\ 1,200\\r=0.01$

substitute in the formula above

$A=\ 1,200(1+0.01*60)$

$A=\ 1,200(1.6)=\ 1,920$