Mr. Nguyen opened a savings account with an initial deposit of 480 and will not make any additional deposits or withdrawals. The account earns 2% simple interest per year. What is the total amount that Mr. Nguyen will have in his account at the end of 3 years?

Solution

M r . N gu ye n o p e n e d a s a v in g s a cco u n t w i t h an ini t ia l d e p os i t o f 480 an d w i ll n o t mak e an y a dd i t i o na l d e p os i t s or w i t h d r a w a l s . T h e a cco u n t e a r n s 2% s im pl e in t eres t p er ye a r . Wha t i s t h e t o t a l am o u n t t ha t M r . N gu ye n w i ll ha v e in hi s a cco u n t a t t h e e n d o f 3 ye a rs ?

Amount : 508.8

Solution steps

Translate the problem into an equation:

A = 480 (1 + 0.02 \cdot 3)

480 (1 + 0.02 \cdot 3) = 508.8

Amount : 508.8