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If a deposit is made for $125,000.00 in a Money Market Savings Account at a simple interest rate of 1.89%, what would be the ending balance after6 years? Make sure to include dollar ($) sign and comma (,) after thousands place. 3

Answer :

We have to find the interest amount first. To do this, we find the 1.89% of the initial amount:

[tex]i=125,000.00\times\frac{1.89}{100}=125,000.00\times0.0189=2361.5[/tex]

That's the annual interest. If it's add up for 6 years, then the total interest is:

[tex]i_T=i\times6=2,361.5\times6=14,175.00[/tex]

Finally we add this total interest to the initial amount:

[tex]b=125,000.00+14,175.00[/tex]

The ending balance is $139,175.00

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