If Gloria deposits 200 dollars at 7% for 1 year, how much will that deposit be worth at the end of that year!A. 214 dollars B. 340 dollars C. 386 dollars D.1,200 dollars

Solución de tutoría real

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Respuesta rápida

A. 214 dollars

Solución paso a paso

Calculate the interest earned in one year:
- Interest = Principal \(\times \) Rate \(\times \) Time
- Interest = \(200 \times 0.07 \times 1\)
- Interest = \(14\) dollars
Add the interest to the initial deposit:
- Total amount = Principal + Interest
- Total amount = \(200 + 14\)
- Total amount = \(214\) dollars

So, at the end of the year, the deposit will be worth 214 dollars.

Supplemental Knowledge

Simple interest is a quick and easy method to calculate the interest charge on a loan or the return on an investment. The formula for simple interest is:
\[\text { Interest} = \text { Principal} \times \text { Rate} \times \text { Time} \]
Where:

Principal (P) is the initial amount of money.
Rate (R) is the annual interest rate (expressed as a decimal).
Time (T) is the time period in years.

To find the total amount at the end of the investment period, you add the interest to the principal.

From Concepts to Reality

Imagine having some savings and investing it into an account offering a fixed interest rate; understanding simple interest can help predict how quickly it will grow over time. For example, depositing 1,000 dollars dollars at an interest rate of 5% means your balance will have grown by 50 dollars thanks to earned interest after 12 months!

Grasping financial concepts like simple interest can significantly impact your personal finance management. To delve deeper into such topics or get help with other educational needs, explore UpStudy’s live tutor question bank! Our AI-powered problem-solving services offer expert guidance tailored to your specific requirements.
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