Final answer:
a. Gerry will earn $26.95 in interest in one year. b. His balance will be $1,256.95 after one year. c. Gerry's interest for the second year will be $27.52.
Step-by-step explanation:
a. To calculate the amount of interest Gerry will earn in one year, we can use the formula:
Interest = Principal x Interest Rate x Time
Where:
Principal = $1,230
Interest Rate = 2.19% = 0.0219 (in decimal form)
Time = 1 year
So, the interest Gerry will earn is:
Interest = $1,230 x 0.0219 x 1 = $26.9535 (rounded to $26.95)
b. To calculate Gerry's balance after one year, we can simply add the interest earned to the principal amount:
Balance = Principal + Interest
Balance = $1,230 + $26.95 = $1,256.95
c. If Gerry withdraws all the principal and interest after the first year and deposits it in another one-year account at the same rate, the interest for the second year can be calculated in the same way as in part a:
Interest = Principal x Interest Rate x Time
Interest = $1,256.95 x 0.0219 x 1 = $27.52096 (rounded to $27.52)
d. To calculate Gerry's balance after two years, we need to add the interest earned for the second year to the balance at the end of the first year:
Balance = Previous Balance + Interest
Balance = $1,256.95 + $27.52 = $1,284.47
e. To compare the accounts of Gerry and Colin from Exercise 9 and determine who earned more interest in the second year, we need more information about Colin's account or Exercise 9. Without that information, we cannot determine who earned more interest in the second year between Gerry and Colin.