Question

A savings account earns 7.2 (APR) compounded monthly, so it earns 0.6% each month. Cooper has $1500 in the account now. if he deposits an additional $500 at the beginning of the month, how much total interest will Cooper receive at the end of the month?

A.$12.00.
B.$15.60.
C.$14.40.
D.$12.60.
please help

Answer 1

12 dollars is correct

Explanation:

Answer 2

Cooper will receive $12.00 at the end of the month.

Solution-

Cooper has $1500 in the account now and he deposits an additional $500 at the beginning of the month.

So the total principal becomes 1500+500 = $2000

Given here,

APR = annual percentage rate = 7.2%

But as we have to calculate the monthly interest, so monthly interest rate would be
`=(7.2)/(12)=0.6\%`

Time period = 1 month

So, the interest after 1 month will be,

`\text{interest}=\frac{\text{Principal}* \text{Rate of interest}* \text{Time period}}{100}`

`=(2000* 0.6* 1)/(100)`

`=\$12.00`

Therefore, Cooper will receive $12.00 at the end of the month.