Question

Sheron deposited $1000 in her savings account that pays a 1.5% annual interest rate. How much money will she have in the bank 18 months from the time of her deposit?

(a) $1,015
(b) $1,015.50
(c) $1,025
(d) $1,025.50

Answer 1

Sheron will have $1,022.50 in the bank 18 months from the time of her deposit.

Step-by-step explanation:

To calculate the amount of money Sheron will have in the bank after 18 months, we need to use the formula for simple interest:

Simple Interest = Principal x Rate x Time

In this case, the principal is $1000, the rate is 1.5% (or 0.015 as a decimal), and the time is 18 months (or 1.5 years).

Substituting the values into the formula, we get:

Simple Interest = $1000 x 0.015 x 1.5 = $22.50

To find the total amount of money, we add the simple interest to the principal:

Total Amount = Principal + Simple Interest = $1000 + $22.50 = $1022.50

Therefore, Sheron will have $1022.50 in the bank 18 months from the time of her deposit. The closest option to this amount is (d) $1,025.50.