Question

Mindy deposits $250 into a savings account that pays simple interest. If the interest rate is 1.5%, what is her account balance at the end of 2 years if she makes no withdrawals?

A.253.75
B.257.50
C.253.00
D.507.50

Answer 1

Lindsay’s interest is $3 for one year. Using the formula for interest, I = prt, Lindsey’s money is earning at a rate of 1.2%. Jenn has earned $3.75 for one year. Her money is earning at a rate of 1.5%, which is a higher interest rate.

Explanation:

Answer 2

The answer is answer choice B. 257.50