Franklin deposited $1,400 in a savings account that accrues simple interest at 6.75%. What is the balance in his account at the beginning of the third quarter?
P = Po + Po*r*t.
P = 1400 + 1400*0.0675*0.5 = $1447.25.
NOTE: The beginning of the 3rd quarter is the end of the 2nd qtr.
One thousand dollars in a savings account pays 7% interest per year. The interest earned after the first year is added to the account. How much interest is earned on the new principal the following year?
To find the balance in Franklin's account at the beginning of the third quarter, we need to calculate the interest earned on the deposit and add it to the initial deposit.
Step 1: Calculate the interest earned.
Interest = Principal x Rate x Time
Given:
Principal (initial deposit) = $1,400
Rate (interest rate) = 6.75% = 0.0675 (expressed as a decimal)
Time (in years) = 2 quarters (since we want the balance at the beginning of the third quarter)
Interest = $1,400 x 0.0675 x 2 quarters = $189
Step 2: Add the interest earned to the initial deposit.
Balance = Initial deposit + Interest
Balance = $1,400 + $189
Balance = $1,589
Therefore, the balance in Franklin's account at the beginning of the third quarter is $1,589.
To find the balance in Franklin's account at the beginning of the third quarter, we need to calculate the simple interest earned on his deposit.
First, let's calculate the interest earned for one year. The formula for simple interest is:
I = P * r * t
Where:
- I is the interest earned
- P is the principal amount (the initial deposit)
- r is the interest rate (in decimal form)
- t is the time in years
In this case, P = $1,400, r = 6.75% (or 0.0675 as a decimal), and t = 1 year.
I = $1,400 * 0.0675 * 1 = $94.50
The interest earned for one year is $94.50.
Next, let's calculate the interest earned for one quarter. Since one year has four quarters, we divide the interest earned for one year by 4:
Interest for one quarter = $94.50 / 4 = $23.625
Therefore, Franklin's account balance at the beginning of the third quarter would be his initial deposit plus the interest for two quarters:
Balance at the beginning of the third quarter = $1,400 + $23.625 + $23.625 = $1,447.25
So, the balance in Franklin's account at the beginning of the third quarter is $1,447.25.