Jessica invested $625 in an account that compounds interest annually at a rate of 6%.

Use the drop down to complete the sentence.

After 1 year, the interest in Jessica’s account is (Select) 
(Select)
$62.50
$58.50
$43.50
$37.50
  , and the total amount in her account is

To calculate the interest Jessica earns after 1 year, we use the formula for simple interest:

\[
\text{Interest} = P \times r \times t
\]

Where:
- $P = 625$ (the principal amount),
- $r = 6\% = 0.06$ (the annual interest rate),
- $t = 1$ year.

Substituting these values:

\[
\text{Interest} = 625 \times 0.06 \times 1 = 37.50
\]

So, the interest after 1 year is **$37.50**.

The total amount in her account after 1 year is:

\[
\text{Total amount} = \text{Principal} + \text{Interest} = 625 + 37.50 = 662.50
\]

Thus, after 1 year:
- The interest is **$37.50**, and
- The total amount in her account is **$662.50**.

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Would you like more details or have any other questions?

### 5 Related Questions:
1. How would the total change if the interest was compounded semi-annually instead of annually?
2. What would be the total amount after 2 years with the same interest rate?
3. How does compound interest differ from simple interest?
4. If Jessica invested at 8% interest instead of 6%, how much would she earn after 1 year?
5. What happens to the total amount if Jessica withdraws $100 before the end of the first year?

### Tip:
Compound interest grows faster over time than simple interest because it earns interest on both the initial principal and accumulated interest.

Jessica invested $625 in an account that compounds interest annually at a rate of 6%. After 1 year, the interest in Jessica’s account is (Select) $62.50, $58.50, $43.50, $37.50, and the total amount in her account is.

Learn how to calculate the interest on Jessica's $625 investment, which compounds annually at a 6% rate. This example uses the simple interest formula to find that the interest after 1 year is $37.50, with a total balance of $662.50. Suitable for students in Grades 6-8.

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