Question

Sam deposits 18,000 each year into retirement account with a 3.5% simple interest rate. If he deposits the same amount each year, how much money will he have at the end of the year?

A.13,625
B.26,725
C.52,250
D75,780

Answer 1

Use the formula for simple interest and then add that interest to the initial amount:

$18000 + $18000(0.035)(1) = $18630 (answer)