2. Simple versus compound interest

Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question.

Addison deposited $1,000 in a savings account at her bank. Her account will earn an annual simple interest rate of 5.8%. If she makes no additional deposits or withdrawals, how much money will she have in her account in 9 years?

$1,661.01

$1,061.36

$158.00

$1,522.00