Question

Rachel earns 2% simple annual interest on the money she has in her savings account. Last year she did not deposit to or withdraw from her savings account and earned $35 in interest.

A. How much money did Rachel have in her savings account at the beginning of last year? Explain how you set up an equation to solve this.

B. How much money did Rachel have in her savings account at the end of last year?

Answer 1

A. I = PRT....rearrange.....I / RT = P

35 / (0.02 * 1)= P
35 / 0.02 = P
1750 = P <== at the beginning of last year

1750 + 35 = 1785 <== at the end of last year