00:01
This problem says if $2 ,500 is invested at an interest rate of 4 .5%, we want to find the final value after the given number of years, rounding to the nearest cent.
00:10
And we're given 3 years, 6 years, and 18 years.
00:13
These are our 3 different possibilities for the number of years we're going to leave this money in this account.
00:16
So, since nothing was mentioned about compounded in any sort of way, whether it's continuously or monthly or anything like that, we're going to assume simple interest formula here, where y equals a times 1 plus r raised to the t, and y is our final amount, and that's what we're trying to find each time.
00:32
So that's y equals a, where a is our initial amount, which won't change, 2 ,500 or 2 ,500, times 1 plus our rate, and our rate is the 4 .5%, but it needs to go into the formula as its decimal representation, which would be 1 plus 0 .045, and that comes out to 1 .045 for 1 plus r...