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Bob has saved $285 each month for the last 6 years to make a down payment on a house. The account earned an interest rate of .37 percent per month. How much money is in Bob's account?

1 Answer

5 votes

Answer:

$26000

Step-by-step explanation:

Bob deposit $285 into a bank account earning 0.39% simple interest per month.

The interest on this money for the 6 year period will first be obtained and then added to the total amount Bob deposited during this period.

Bob deposited a total of 285×72=$20500 (72 is obtained by converting 6 years to months i.e. 6×12)

The interest during this period =p×r×t

Where p=$285 (amount Bob saves per month)

r=.39/100 or 0.039 intrest rate earned per month

t=6 years or 72 months

Interes accred for 6 years= 285×0.039×72=$80

Total amount Bob will have at the end of 6 years =80+20520=$26000

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