Question 4/Multiple Choice Worth 3 points) (Simple Interest and Arithmetic Sequences LC) The equation 687.5=550(1+0.051) represents the amount of money earned on a simple interest savings account What does the value 550 represent? The value 550 represents the initial balance in the account, which means the account started with 550 The value 550 represents the final balance in the account, which means the account balance ended with 550 The value 550 represents the final balance in the account, which means the account balance started with 550 The value 550 represents the amount of interest earned, which means 550 was added to the initial balance.

The correct answer is: **The value 550 represents the initial balance in the account, which means the account started with $550.**<br /><br />The formula for simple interest is A = P(1 + rt), where:<br /><br />* A = the future value of the investment/loan, including interest<br />* P = the principal investment amount (the initial deposit or loan amount)<br />* r = the annual interest rate (decimal)<br />* t = the time the money is invested or borrowed for<br /><br />In the given equation, 687.5 = 550(1 + 0.051), we can see that it follows the simple interest formula. 550 is in the position of P, the principal amount. Therefore, 550 represents the initial balance.<br />