Question

You invest $2000 in an account at 4.5% per year simple interest. How much will you have in the account at the beginning of the 8th year? Round your answer to the nearest whole dollar.

A. $2560
B. $2640
C. $2720
D. $2630

Answer 1

answer is 2720

solution below

First, converting R percent to r a decimal

r = R/100 = 4.5%/100 = 0.045 per year.

solving our equation:

A = 2000(1 + (0.045 × 8)) = 2720

A = $2,720.00

the total amount accrued, principal plus interest, from simple interest on a principal of $2,000.00 at a rate of 4.5% per year for 8 years is $2,720.00