an investment earns 7.5% interest in one year. if the money is withdrawn before th year is up, the interest is protrated so that a proportional amount of the interest is paid out. if $1960 is invested, what is the total amount that can be withdrawn when the account is closed out after 5 months?
To find the total amount that can be withdrawn when the account is closed out after 5 months, we need to calculate the prorated interest earned on the investment.
First, we need to determine the prorated interest for 5 months. Since there are 12 months in a year, 5 months is equivalent to 5/12 or approximately 0.4167 years.
The annual interest rate is 7.5%, which can be written as 0.075 in decimal form.
Next, we calculate the prorated interest by multiplying the investment amount by the interest rate and the proportion of time (in years) the money was invested for:
Prorated Interest = $1960 * 0.075 * 0.4167
Prorated Interest = $61.17 (rounded to two decimal places)
Finally, to determine the total amount that can be withdrawn when the account is closed out after 5 months, we add the prorated interest to the original investment:
Total Amount to be Withdrawn = $1960 + $61.17
Total Amount to be Withdrawn = $2021.17 (rounded to two decimal places)
Therefore, the total amount that can be withdrawn when the account is closed out after 5 months is approximately $2021.17.