on january 1st, 2003, gerry opened a savings account that paid 3.25% annual interest. his initial deposit…

on january 1st, 2003, gerry opened a savings account that paid 3.25% annual interest. his initial deposit was $1,100. if gerry didnt deposit or withdraw any additional money, what was his balance at the close of december 31st, 2012? (hint: determine how many years the savings account was open for.)

on january 1st, 2003, gerry opened a savings account that paid 3.25% annual interest. his initial deposit was $1,100. if gerry didnt deposit or withdraw any additional money, what was his balance at the close of december 31st, 2012? (hint: determine how many years the savings account was open for.)

Answer

Explanation:

Step1: Calculate number of years

The account was opened on January 1st, 2003 and closed on December 31st, 2012. So the number of years $n=2012 - 2003=9$.

Step2: Use compound - interest formula

The compound - interest formula for simple interest (since no compounding details are given, we assume simple interest here) is $A = P(1+rt)$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. Here, $P=$1100$, $r = 0.0325$ (since $3.25%=0.0325$), and $t = 9$. $A=1100\times(1 + 0.0325\times9)$

Step3: Calculate the value of $A$

First, calculate $0.0325\times9 = 0.2925$. Then $1+0.2925=1.2925$. $A = 1100\times1.2925=$1421.75$

Answer:

$1421.75$