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?
Mathematics · Middle School · Mon Jan 18 2021
Answered on
Given:
Principal amount ( P ) = $10,000
Rate ( r ) = 3.5% or 0.035 ( divided by 100)
Term ( t ) = 7 years
Formula for the future value of simple interest.
A = P ( 1 + rt)
Solution:
Substitute the given values of P, r and t to the formula for simple interest.
A = $10,000 ( 1 + (0.035)(7))
A = $10,000 ( 1.245)
A = $12,450
Final answer:
The future value of the amount is $12,450.