oliver deposited $1640.70 in a savings account that earns 3.2% simple interest. what will oliver's account balance be in 8 months?

Question

oliver deposited $1640.70 in a savings account that earns 3.2% simple interest. what will oliver's account balance be in 8 months?

Answer 1

Ok, so the formula for simple interest is:

 

A=P(1+rt)

 

I'll Highlight where each variable is in the word problem to make it easier.

 

Oliver deposited $1640.70[P] in a savings account that earns 3.2%[R] simple interest. what will oliver's account balance[A] be in 8 months[T]?

 

Before we plug in everything into the equation, remember two things: The rate needs to be in decimal form, and the time needs to be in years.

 

So R=.032 and T= 8/12 or 2/3 or .6667 years

 

As we can see from the word problem, the only variable we don't have a number for is A, the total accrued amount which is Oliver's account balance. So we are solving for A. Let's plug everything in and I'll let you find the answer.

A= P(1 +rt)

 

A= 1640.70(1 + (.032 x .6667))

 

Answer 2

i=prt      Interest=principal times rate times time (in years)

i = 1640.70(.032)(2/3)             8/12 = 2/3 of a year

i = $35.00

Total Amount = 1640.70 + 35

TA = $1675.70