Question

1. Jim opens a savings account with $22,500. His account pays 3.5% simple interest. At the end of 5.5 years, Jim closes the account. How much interest does he earn? What is the total value of his account when he closes it?

Answer 1

$27186.57

Explanation:

Formula: start(interest)^time

First, we need to calculate the interest which in this case would be 1.035 (1+(3.5/100)) since it is increasing 3.5% each year. Then we can just plug the values into the formula to get:

22,500(1.035)^5.5 = 27186.57