Regina's average balance checking account pays simple interest of 3.6% annually, and she made $2.31 in interest last month. What was Regina's average balance last mont…

Question

asked Jun 17, 2018 223k views

2 Answers

Chris Parry · Answer 1 · 2018-06-22T20:36:15+0000

Answer:

A. $770.00

Explanation:

We have been given that Regina's average balance checking account pays simple interest of 3.6% annually, and she made $2.31 in interest last month.

We will use simple interest formula to solve our given problem.

I=Prt , where,

$I=\text{Amount of interest}$ ,

$P=\text{Principal amount}$ ,

$r=\text{Annual interest rate in decimal form}$ ,

$t=\text{Time}$

Let us convert our given interest rate in decimal form.

$3.6\%=(3.6)/(100)=0.036$

Now we will divide 0.036 by 12 to find the monthly interest rate.

(0.036)/(12)=0.003

$\$2.31=P*0.003*1$

$\$2.31=P*0.003$

$(\$2.31)/(0.003)=P$

$P=\$770.00$

Therefore, option A is the correct choice.