3-1 Ms. Choi started a part-time job at a cafe. She estimates that ⅛ of the people who order coffee also order pastries. Write a
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Answer:
The account balance six months from today is $5,187.5.
Step-by-step explanation:
This is a compound interest problem
The compound interest formula is given by:
In which A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit t and t is the time the money is invested or borrowed for.
In this problem, we have that
The total amount formula changes after 6 years, at which point each of the principal(initial money), interest rate, and n changes.
This item asks only the balance six months from today, so we use the information given for the first 6 years.
A is the account balance, the value we hope to find.
The loan is of $5,000. So
The account earns 7.5% per annum compounded half yearly, so .
We want to find the account balance in 6 months. However, t is measured in years. So
Solving the equation:
The account balance six months from today is $5,187.5.