Nikita invests $2,000 into a bank account with a 4% annual interest rate. In seven years, which is the most expensive item she could afford to buy
High School · Sat Jun 12 2021
Answered on
Nikita invests into the bank = $2,000 so this is the principal
Time of period for interest = 7 years
Rate of interest = 4%
So , for find the simple interest we apply the formula that is : Interest = Principal * Rate * Time / 100
Interest = $2,000 * 4 * 7 / 100 ( $2000 * 4 * 7 = 56,000$ , 56,000$ / 100 = 560)
Interest that given by bank on $2,000 is = 560$ for 7 years
The amount that bank given to the Nikita after 7 years is : $2,000 + $560 = $2,560
So, the most expensive item she could afford to buy after 7 years is worth $2,560.