julieta invests money in an account paying a simple interest of 5% per year. if no money will be added or…
julieta invests money in an account paying a simple interest of 5% per year. if no money will be added or removed from the investment, what should she multiply her current balance by to find her total balance in a year in one step?
Answer
Explanation:
Step1: Recall simple - interest formula
The simple - interest formula is $A = P(1 + rt)$, where $A$ is the final amount, $P$ is the principal amount (current balance), $r$ is the annual interest rate, and $t$ is the time in years.
Step2: Substitute given values
Given $r = 0.05$ (since $5%=0.05$) and $t = 1$ year. Substituting these values into the formula $A = P(1+rt)$, we get $A=P(1 + 0.05\times1)=P(1 + 0.05)=1.05P$.
Answer:
$1.05$