Question

Boden's account has a principal of $500 and a simple interest rate of 3.9%. Complete the number line. How much money will be in the account after 4 years, assuming Boden does not add or take out any money?

Answer 1

Use the following formula for simple interest rate:

I = P*r*t

where,

P: principal investment = 500

r: interest rate in decimal form = 3.9/100 = 0.039

t: time in years = 4

Replace the previous values into the formula for I:

I = (500)(0.039)(4)

I = 78

The interest after 4 years is $78, then, the amount of money Boden's account has after 4 years is:

$500 + $78 = $578