Ashley invests $9,720 in a one-month money market account paying 3.16% simple annual interest and $8,140 in a two-year CD yielding 3.23% simple annual interest. Assuming Ashley does not reinvest or renew these investments, how much money will she have when both investments reach maturity, to the nearest dollar?

Question

Mathematics

Madelyn Wall

2 December, 19:33

Ashley invests $9,720 in a one-month money market account paying 3.16% simple annual interest and $8,140 in a two-year CD yielding 3.23% simple annual interest. Assuming Ashley does not reinvest or renew these investments, how much money will she have when both investments reach maturity, to the nearest dollar?

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Brownie · Answer 1

For the first investment. A = P (1 + rt); where p = 9,720, r = 0.0316 and t = 1/12

A = 9720 (1 + 0.0316/12) = 9720 (1.0026) = $9,746

For the second investment,

A = 8140 (1 + 0.0323 x 2) = 8140 (1.0646) = $8,666

Total amount she had = $9,746 + $8,666 = $18,412