Question

A principal of $835 is invested in an account at 3% per quarter simple interest. Which of the following sequences describes the dollar amount of principal in the account at quarterly intervals?
a. 835.00, 860.05, 885.70, 911.15, 937.26, ...
b. 835.00, 901.80, 968.60, 1,035.40, 1,102.20, ...
c. 25.05, 50.10, 75.15, 100.20, 125.25, ..
d. 66.80, 133.60, 200.40, 267.20, 334.00, ...
e. 835.00, 860.05, 885.10, 910.15, 935.20, ...

Answer 1

To computer the simple interest take $835 and multiply by .03
The answer is $25.05
So the first quarter there will be a total fo 860.05 in the account.
Since the interest is not being compounded (based on the new amount), the second quarter will also yield $25.05.

$860,05 + 25.05 = $885.10  Answer e. is correct.