Faith invests $4,500 in an account that pays 4% simple interest. How much money will she have at the end of eight years?
A) $4,680
B) $5,367
C) $5,940
D) $6,122
E) $6,159

Question

Quizplus · Accepted Answer

Simple interest is calculated using the formula I = PRT, where P is the principal amount ($4,500), R is the rate (4% or 0.04), and T is the time (8 years). The interest is $4,500 * 0.04 * 8 = $1,440. Adding the interest to the principal gives $4,500 + $1,440 = $5,940.

Faith Invests $4,500 in an Account That Pays 4% Simple