Question

Ernie deposits $9,800 into a pension fund. The fund pays a simple interest rate of 7% per year. What will the balance be after four years? Give your answer in dollars to the nearest dollar. Do not include commas or the dollar sign in your answer. For example if your answer is $1,234.56 enter 1235.

Answer 1

hello

to solve this question, we need to use the formula of simple interest which is

`\begin{gathered} s.i=p(1+rt) \\ p=\text{ principal} \\ r=\text{rate} \\ t=\text{time} \end{gathered}`

the prinicipal (p) = $9800

rate (r) = 7% = 7 /100 = 0.07

time (t) = 4 years

now let's substitute the values into the formula

`\begin{gathered} s\mathrm{}i=9800(1+0.07*4) \\ s\mathrm{}i=9800(1+0.28) \\ s\mathrm{}i=9800*1.28 \\ \text{s}\mathrm{}i=12544 \\ \end{gathered}`

the simple interest on her deposit after 4 years is $12544