Since APR interest is a simple interest rate, we are going to use the formula for calculating simple interest: [tex]A=P(1+rt)[/tex]
where
[tex]A[/tex] is the final amount after [tex]t[/tex] years
[tex]P[/tex] is the initial investment
[tex]r[/tex] is the interest rate in decimal form
[tex]t[/tex] is the number of years
Mathematical steps for solving the problem:
We can infer from our problem that you are going to invest $800-$640=$160 in your savings account, so [tex]P=160[/tex]. To convert the interest rate to decimal form, we are going to divide the rate by 100%
[tex]r= \frac{4.5}{100} =0.045[/tex]. Since you are leaving the money in your savings account for a year, [tex]t=1[/tex]. Lets replace those values in our formula:
[tex]A=P(1+rt)[/tex]
[tex]A=160[1+(0.045)(1)][/tex]
[tex]A=160(1+0.045)[/tex]
[tex]A=160(1.045)[/tex]
[tex]A=167.2[/tex]
We can conclude that your total savings after buying the refurbished laptop are: $167.2
