How much money is currently in their account?

Question

Joyce and Michael received $4,300.00 for their wedding from the 300 guests that attended. They deposited it into a money-market savings account which pays 6.1% interest per year. They have been married for 18 months. How much money is currently in their account??

Answer 1

The information here indicates simple interest, the formula for which is I= P x R x T where P = Principal, R = annual rate as a decimal, and T = Time

 

At the end of one year, the Interest will be Principal x Rate x Time, or $4,300 x 0.061 x 1 year. The value will be $262.30.

 

At the end of year one, the balance of their account will be $4,300 + 262.30 = $4,562.30

 

Six months later (18 months in all), the balance will be $4,562.30 + ($4562.30 x 0.061 x 0.5year) ≅ $4,700