Question

Jack has deposited $6,000 in a money market account with a variable interest rate. The account compounds the interest monthly. Jack expects the interest rate to remain at nine percent annually for three months, then be at 12 percent annually for three months, before returning to nine percent annually for another three months. Find the total amount in this account after nine months.

Answer 1

Answer: $13,161.264

Explanation:

interest rate after first 3 months 9% for 3 months.

I = P x R x T / 100

Where;

I= interest

P= principal

R= interest Rate

= Time

$6000 x 9% x 3 / 100

= $ 1620

Interest for next 3 months 12%

P= $6000 + $1620 = $7620

I= 7620 x 12% x 3 /100 = $2,743.2

Interest after for last 3 months 9%

P= $7620 + $2743.2 = $10,363.2

I = $10,363.2 x 9% x 3 / 100

= $2798.064

Principal after 9months

= $13,161.264