Daniel has a money market account with $1,200 the bank offered him a special rate of 5.25% per month.?

Question

How much money will daniel have after the first month?
a) $6.30
b) $1,137
c) $1,263
d) $63

Answer 1

Convert the percent to decimal

5.25 / 100 = 0.0525

Multiply 1200 times 0.0525

1200 x 0.0525 = 63

Add 1200 plus 63

1200 + 63 = 1263

Daniel will have $ 1263 the first month

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Answer 2

The answer is C as the interest earned will be $63 and that added to the original balance equals $1,263.

This is a simple interest calculation based on the interest being paid at the end of the month and that balance of the account stays at $1,200.

Should this interest be 'compounded daily' this the amount would be higher.

Hope this helps!

Answer 3

$1,263