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STEP BY STEP
A = $1,313.75
Equation:
A = P(1+rt)
Calculation:
First converting R percent to R a decimal
R = r/100 = 3.4%/100 = 0.034 per year.
Putting time into years for simplicity,
18 months / 12 months/ year = 1.5 years
Solving our equation:
A = 1250(1+[0.034 * 1.5]) = $1,313.75
The total amount accrued, principal plus interest, from simple interest on a principal of $ 1,250.00 at a rate of 3.4% per year for 1.5 years (18 months) is $1,313.75
The ANSWER would be
D. $1.31375
A = $1,313.75
Equation:
A = P(1+rt)
Calculation:
First converting R percent to R a decimal
R = r/100 = 3.4%/100 = 0.034 per year.
Putting time into years for simplicity,
18 months / 12 months/ year = 1.5 years
Solving our equation:
A = 1250(1+[0.034 * 1.5]) = $1,313.75
The total amount accrued, principal plus interest, from simple interest on a principal of $ 1,250.00 at a rate of 3.4% per year for 1.5 years (18 months) is $1,313.75
The ANSWER would be
D. $1.31375
$[tex]1,313.75[/tex] is the total balance of an account after [tex]18[/tex] months with an initial deposit of $[tex]1,250[/tex]
What is balance?
In banking and accounting, the balance is the amount of money owed on an account. In bookkeeping, “balance” is the difference between the sum of debit entries and the sum of credit entries entered into an account during a financial period. When total debits exceed total credits, the account indicates a debit balance.
What is Interest?
In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. It is distinct from a fee which the borrower may pay the lender or some third party.
According to questions, a certain bank pays [tex]3.4[/tex]% interest per year for a certificate of deposit, or CD.
We have to find the total balance of an account after [tex]18[/tex] months with an initial deposit of $[tex]1,250[/tex]
Total balance can be calculated using the following formula:
[tex]A = P(1+rt)[/tex]
Here [tex]r=\frac{3.4}{100} =0.034[/tex]
[tex]t=\frac{18}{12} =1.5[/tex]
So,[tex]A = 1250(1+0.034[/tex]×[tex]1.5[/tex])
[tex]=[/tex]$[tex]1,313.75[/tex]
Therefore,$[tex]1,313.75[/tex] is the total balance of an account after [tex]18[/tex] months with an initial deposit of $[tex]1,250[/tex]
Hence, we can conclude that Option(d) is correct.
Learn more about Interest here:
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