Answer:
Therefore, the correct option is OPTION C.
Step-by-step explanation:
If Orlando had not made his early withdrawal, the amount of money he would have earned is:
F = 0.065($16,000)(8) = $8.320
Given that he withdraw $3500, he now earns:
F1 = (0.065)($16,000)(5) + ($12,500)(0.065)(3)
F1 = $5200 + $2437.5 = $7637.5
And now we have to take into acount the year of penalty, which is one year’s worth of interest on the amount withdrawn.
Penalty= $3500(0.065)(1) = $227.5
So the total money he earns now is: $7637.5 - $227.5 = $7410
Then, the amunt of money he could have earn but he didn't is:
Money = $8.320 - $7410 = $910
Therefore, the correct option is OPTION C.
