Tyler’s mom also has $1000 that she wants to put in a savings account. She is saving her money for retirement. She plans to retire in 30 years.
Tyler’s mom must also choose between Bank A and Bank B.
Bank A offers 4% simple interest. How much would Tyler’s mom’s investment be worth after 30 years in this account? Show your calculations below.
To calculate the future value of Tyler's mom's investment after 30 years with a simple interest rate of 4%, we can use the formula:
Future Value = Present Value + (Present Value * Interest Rate * Time)
= $1000 + ($1000 * 0.04 * 30)
= $1000 + ($1000 * 0.04 * 30)
= $1000 + ($1200)
= $2200
Therefore, Tyler's mom's investment would be worth $2200 after 30 years in Bank A.