Question

Savings Account: A woman deposits $900 in a savings account that pays 2% annually. If she withdraws all the money in the account after 120 days, how much does she withdraw (rounded to the nearest dollar)?

She withdraws $
900
Incorrect after 120 days.

Answer 1

The woman will withdraw $906 from her savings account after 120 days, including the interest earned at an annual rate of 2% on her initial $900 deposit.

Step-by-step explanation:

To calculate how much a woman will withdraw from a savings account after 120 days, given an initial deposit of $900 and an annual interest rate of 2%, we will use the formula for simple interest:

Interest (I) = Principal (P) × Rate (r) × Time (t).

First, we need to convert the interest rate to a decimal by dividing by 100. Next, the time has to be converted to years because the rate is annual, so 120 days is 120/365 of a year.

• The formula thus becomes: I = $900 × 0.02 × (120/365).
• Calculating the interest: I = $5.89 (rounded to two decimals).

After adding this interest to the principal, the total amount the woman will withdraw is the sum of $900 (principal) plus $5.89 (interest), which equals $905.89.

When rounding to the nearest dollar, she will withdraw $906.