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8 July, 08:18

Ashley invests $9,720 in a one-month money market account paying 3.16% simple annual interest and $8,140 in a two-year CD yielding 3.23% simple annual interest. Assuming Ashley does not reinvest or renew these investments, how much money will she have when both investments reach maturity, to the nearest dollar?

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  1. 8 July, 08:46
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    For the first investment. A = P (1 + rt); where p = 9,720, r = 0.0316 and t = 1/12

    A = 9720 (1 + 0.0316/12) = 9720 (1.0026) = $9,746

    For the second investment,

    A = 8140 (1 + 0.0323 x 2) = 8140 (1.0646) = $8,666

    Total amount she had = $9,746 + $8,666 = $18,412
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