Question

You put $1200 in an account that earns 3% simple interest. Y= a (1 + r)t Find the total amount in the account after four years.

Answer 1

Hello!

To find how much money total will be in the account after four years, you need to use the function, $y = a(1 + r)^{t}$, as seen above. In this function, a is the starting value, r is the interest rate, and t is the amount of time (in years).

Before substituting values into the function, we need to convert 3% into a decimal. Remember that all percentages are out of 100, so we divide 3 by 100 and remove the percentage sign, or move the decimal two places to the left.

3/100 = 0.03 | 0.03 is the interest rate.

With all the necessary values, we can find the total amount in the account. In this case, a = 1200, r = 0.03, and t = 4.

$y = 1200(1 + 0.03)^{4}$

$y = 1200(1.03)^{4}$

$y = 1200(1.12550881)$

y = 1350.610572, which can be rounded to 1350.61 dollars.

Therefore, after 4 years, the total amount in the account will be about 1350.61 dollars.