Question

gabriela invested her summer earnings of $5000 in a savings account for college. the account pays 3.5% simple interest. what will be the value of this account after 2 years?
the value of this account after 2 years will be $
(round to the nearest cent as needed.)

Explanation:

Step1: Identify the simple - interest formula

The formula for simple interest is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. The total amount $A$ in the account after $t$ years is $A=P + I=P(1 + rt)$.

Step2: Convert the interest rate to decimal

The annual interest rate $r = 3.5\%=0.035$. The principal amount $P = 6000$ and the time $t = 2$ years.

Step3: Calculate the total amount

Substitute the values into the formula $A=P(1 + rt)$:
\[

$$\begin{align*} A&=6000\times(1+0.035\times2)\\ &=6000\times(1 + 0.07)\\ &=6000\times1.07\\ &=6420 \end{align*}$$

\]

Answer:

$6420$