$550
b.
$1,080
c.
$17,310
d.
$18,411
Answer:
Total Amount ≈ $18,411.59
D.
Step-by-step explanation:
In order to determine the total amount that Ashley will possess when both investments reach maturity, one may utilize the formula for simple interest:
Simple Interest (I) = P * r * t
Where:
I = Interest earned
P = Principal amount (initial investment)
r = Annual interest rate (expressed as a decimal)
t = Time (in years)
The interest for each investment may be calculated as follows:
For the one-month money market account:
P1 = $9,720
r1 = 3.16% or 0.0316 (as a decimal)
t1 = 1/12 year (one month is 1/12 of a year)
I1 = 9,720 * 0.0316 * (1/12) = $25.63 (rounded to the nearest cent)
For the two-year CD:
P2 = $8,140
r2 = 3.23% or 0.0323 (as a decimal)
t2 = 2 years
I2 = 8,140 * 0.0323 * 2 = $524.96
The total amount that Ashley will possess when both investments reach maturity may now be calculated as follows:
Total Amount = P1 + I1 + P2 + I2
Total Amount = $9,720 + $25.63 + $8,140 + $524.96
Total Amount ≈ $18,411.59
Rounded to the nearest dollar, Ashley will possess approximately $18,412 when both investments reach maturity.