Question

Bonnie deposits $70.00 into a new savings account. The account earns 4.5% simple interest each year. If the money stays in the account for 3 years, what is the total amount of money in the account at the end of 3 years? *

Answer 1

Answer: $‭79.45‬

Explanation:

Simple interest means that the money increases by the same amount every year or period.

The formula to find out what would be in the account is:

= Amount deposited * ( 1 + rate * no. of periods)

= 70 * ( 1 + 4.5% * 3 years)

= 70 * 1.135

= $‭79.45‬