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26 votes
26 votes
Yujin Pon has a principal of $900 in her savings Iccount on October 1. The money earns interest at a rate of 6.5% compounded quarterly until July 1 of the following year. What is the amount in the account on July 1?

а.$914.63

b. $943.75

c.$943.87

d. $944.59

User Dubbaluga
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1 Answer

13 votes
13 votes

Answer: The correct answer is c. $943.87.

Step-by-step explanation: To solve this problem, we need to first determine the length of time between October 1 and July 1 of the following year. This is a period of 9 months, or 3 quarters. We can then use this information to calculate the amount of interest earned over this time period.

The principal in Yujin Pon's account is $900, and the interest rate is 6.5% compounded quarterly. This means that for each quarter, the account will earn 6.5/4 = 1.625% in interest. Over the 3 quarters between October 1 and July 1 of the following year, the account will earn a total of 1.625% * 3 = 4.875% in interest.

To calculate the amount of interest earned, we can multiply the principal by the interest rate:

Interest = Principal * Interest Rate

= $900 * 0.04875

= $43.87

The total amount in the account on July 1 will be the original principal plus the amount of interest earned over the 3 quarters:

Total = Principal + Interest

= $900 + $43.87

= $943.87

Therefore, the correct answer is c. $943.87.

User Coeus
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