Question

Hakim invests $700 in a bank that pays 5% simple interest annually. After one year he uses the money in his account to buy a computer. The original cost of the computer is $750.00 . The computer is on sale for a 20% discount off of the original cost. The sales tax is 4% of the sale price.

After purchasing the computer, how much does Hakim have left in his bank account? Show your work.

Answer 1

The final cost of the computer can be calculated as ...
(original cost)*(1 -0.20)*(1 +0.04)
= $750*0.80*1.04 = $624.00

The ending balance on Hakim's bank account is
$700 +700*.05 = $735.00

The amount remaining after Hakim pays for the computer is
$735.00 -624.00 = $111.00