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Sally deposits $4,000 in a certificate deposit that pays 6 ¾% simple interest. What is her balance after one year?

1 Answer

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Sally's balance after one year is $4,270.

To solve the problem, we can use the simple interest formula:

Interest = (Principal x Rate x Time)

Where:

- Principal = $4,000

- Rate = 6 ¾% = 0.0675

- Time = 1 year

Plugging these values into the formula, we get:

Interest = ($4,000 x 0.0675 x 1) = $270

So Sally earns $270 in interest over one year. To find her balance after one year, we simply add the interest to the principal:

Balance = Principal + Interest

Balance = $4,000 + $270

Balance = $4,270

User Bazley
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