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16 December, 21:34

Danny invests $10,000 in a savings account that pays 3.5% simple interest. If Danny does not make any additional deposits or withdrawals, how much will be in the account after 7 years?

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Answers (2)
  1. 16 December, 22:30
    0
    Answer: $12,450

    Step-by-step explanation:

    Hi, to answer this question we have to apply the simple interest formula:

    I = p x r x t

    Where:

    I = interest

    P = Principal Amount

    r = Interest Rate (decimal form)

    Replacing with the values given

    I = 10,000 x (3.5/100) x 7

    I = 2,450

    Adding the interest to the amount invested.

    10,000 + 2,450 = $12,450

    Feel free to ask for more if needed or if you did not understand something.
  2. 16 December, 22:33
    0
    The amount in the account after 7 years is $12,450

    Step-by-step explanation:

    To calculate the amount that will be in the account after 7 years, what we do is to simply add the interest to the principal.

    Thus, we need to calculate the interest. Mathematically, the simple interest can be calculated using the formula below;

    I = PRT/100

    where P is the principal which is the amount deposited initially into the account = $10,000

    R is the interest rate which is 3.5%

    T is time which is 7 years

    Plugging these figures, we have

    I = (10,000 * 3.5 * 7) / 100

    I = $2,450

    Thus the amount we have in the account which is interest + capital = 2,450 + 10,000 = $12,450
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