Question

Bart invested $820 in a money market fund with an expected annual return of 2.77%. The MMF imposes fees costing him $14 at withdrawal after a year. How much money will Bart have in one year?

a) $814.74
b) $826.63
c) $822.89
d) $810.91

Answer 1

Bart will have approximately $828.35 in one year.

Step-by-step explanation:

To calculate how much money Bart will have in one year, we need to subtract the fees from his investment and add the expected return.

First, let's calculate the fees. The fees cost Bart $14, which we subtract from his initial investment of $820: $820 - $14 = $806.

Next, let's calculate the expected return. The expected annual return is 2.77%, so we can calculate it by multiplying Bart's initial investment by the decimal form of the percentage: $806 * 0.0277 = $22.3492.

Finally, we add the expected return to the remaining investment: $806 + $22.3492 = $828.3492.

Therefore, Bart will have approximately $828.35 in one year.