Question

Ashley invests $9,720 in a one-month money market account paying 3.16% simple annual interest and $8,140 in a two-year CD yielding 3.23% simple annual interest. Assuming Ashley does not reinvest or renew these investments, how much money will she have when both investments reach maturity, to the nearest dollar?

Answer 1

D. $18,411

Explanation:

I just answered it correct

Answer 2

For the first investment. A = P(1 + rt); where p = 9,720, r = 0.0316 and t = 1/12
A = 9720(1 + 0.0316/12) = 9720(1.0026) = $9,746

For the second investment,
A = 8140(1 + 0.0323 x 2) = 8140(1.0646) = $8,666

Total amount she had = $9,746 + $8,666 = $18,412