Olivia deposits $6,952 in a savings account paying 3.72% interest. to the nearest dollar, how much money does olivia have in total after sixteen years?

The principal, P is $6 952.

Interest, R is 3.72% per year.

Time T = 16 years.

For simple interest, Amount A =   P(1 + RT)

For compound interest, A = P(1+R)^T

a) If the money was saved as Simple Interest, Amount A

A = 6952 * (1 + 3.72% * 16)

A = 6952 * ( 1 +  (3.72/100) * 16 )

A = 6952 * ( 1 + 0.5952)

A = 6952 * 1.5952

A = 11 089.8304

Amount if savings was simple interest, Amount at the end of 16 years =

$11 089.83

b) If the money was saved as Compound Interest, Amount A

A = 6952 * (1 + 3.72%)^16

A = 6952 * ( 1 +  (3.72/100))^16

A = 6952 * ( 1 + 0.0372)^16

A = 6952 * 1.0372^16.          Using your calculator.

A = 12 471.24735

Amount if savings was compounded interest, Amount at the end of 16 years =

$12 471.25

The question is was the amount saved as Simple Interest or Compound Interest?

It was not stated, but it is normal to use compound interest in real life.

I hope this helped.

The answer should be 5.