Daniel has a Money Market account with $1,200. The bank offered him a special rate of 5.25% per month. How much money will Daniel have after the first month?

Answer 1

To calculate how much money Daniel will have in his Money Market account after the first month, we can use the formula for calculating the interest earned:

\[ \text{Interest} = \text{Principal} \times \text{Rate} \]

Where:

• Principal = $1,200
• Rate = 5.25% = 0.0525 (as a decimal)

Now, plug in the values:

\[ \text{Interest} = 1200 \times 0.0525 = 63 \]

Next, we add the interest earned to the initial amount in the account:

\[ \text{Total amount after 1 month} = \text{Principal} + \text{Interest} = 1200 + 63 = 1263 \]

Therefore, after the first month, Daniel will have $1,263.