Question

You invest $3000 in an account at 3.5% per year simple interest. How much will you have in the account at the beginning of the 7th year? Round your answer to the nearest whole dollar.

Answer 1

$3735

Explanation:

The formula for simple interest is I = Prt, where I is the interest earned, P is the initial investment, r is the interest rate in decimal form, and t is the time in years. We have everything we need to find the interest, which is the amount your investment earned while it sat there for 7 years. Once we find that interest amount, we will add it to the intial investment to find the total amount after 7 years that your money has grown to.

I = 3000(.035)(7) so

I = 735

3000 + 735 = 3735

Answer 2

$3,630

Explanation:

You invest $3,000 in an account at 3.5% per year simple interest.

We have to calculate the amount in the account at the beginning of the 7th year. This means we have to calculate the interest for completed 6 years.

Formula for simple interest

A = P(1+rt)

A = Amount after maturity

P = Principal amount ( 3,000)

r = rate of interest in decimal ( 0.035)

t = time in years ( 6 )

Now we put the values in to formula

A = 3,000(1 + 0.035 × 6)

A = 3,000 ( 1 + 0.021 )

A = 3,000 × 1.21

A = $3,630

The amount would be $3,630 at the beginning of the 7th year.