Question

For this problem identify P, FV, I, r, n, and t.

Answer 1

a) P = 180,000cents

b) FV = 298,418cents

c) I = 118,418cents

d) r = 0.003375

e) n = 12

f) t = 15 years

Explanations:

a) P is the principal in the given question. The principal can be the amount invested or borrowed.

According to the question, the amount invested is $1,800.00, hence the principal P is $1,800 which is equivalent to 180,000cents to the nearest cents

b) The future value is the amount after 15 years of investing the money. According to the question, Sandra earned a total interest of $1,184.18 after 15 years.

Future value = Principal + Interest

Future value = $1,800.00 + $1,184.18

Future value = $2,984.18

Hence FV to the nearest cent is 298,418cents

c) Given the total interest of $1,184.18

Convert to nearest cents

I = 1,184.18 * 100

I = 118,418cents

d) r is the rate in percentage. From the question the rate in percent is

3 3/8 %

Convert to decimal

`\begin{gathered} r=3(3)/(8)\% \\ r=(27)/(8)\% \\ r=(27)/(800) \\ r=0.03375 \end{gathered}`

e) n is the time of compounding. From the question, we are told that amount invested was compounded monthly. Since there are 12 months in a year, hence the value of n is 12.

f) "t" is the time taken by Sandra to invest $1,800 to earn the given interest. From the question, the time it takes is 15 years. Hence;

t = 15 years