Question

In January, Mrs. Smith put $10,000 into

Answer 1

The amount of money she would have is $10,291.50.

The amount of money she would have to buy the gift is the sum of the amount deposited and the interest.

Simple interest is interest that only accrues on the amount of money deposited into the account.

The formula that can be used to determine simple interest is: principal x time x interest rate

Where:

• Principal = amount deposited = $10,000
• Time = 11/12
• Interest rate = 3.18%

$10,000 x 11/12 x 0.0318 = $291.50

$10,000 + $291.50 = $10,291.50