Maria puts $2,500.00 in her money market account earning 8% interest annually. How much interest and how much money would she have after 7 years?
Answer:
At an interest rate of 8% per year Maria will acquire $4,284.56 after 7 years.
Amount of interest = $1784.56
Explanation:
To find the amount of money she would have after 7 years you have to use this equation:
[tex]A = P(1+r)^t[/tex]
A = Total amount
P = Initial amount
r = interest rate
t = time
Let's assign each of the numbers in the question
P = $2,500
r = 0.08 (you have to use the decimal form of the percent, to find it you have to move the decimal point over twice)
t = 7 (years)
Now plug them into the equation
[tex]A = 2500(1+0.08)^7[/tex]
Solve
[tex]A = 2500(1.08)^7\\A = 4,284.56[/tex]
Therefore, at an interest rate of 8% Maria will acquire $4,284.56 after 7 years.
Her interest would be calculated by taking 4,284.56 minus 2500 = 1,784.56
Hope this helps!!
- Kay :)