Question

. On March 1, 2020 you invested $2,500 in a short term investment certificate. An investment of this length earns 1.3% simple interest. How much will your investment be worth on Dec. 15, 2020? Show caculation by BA II plus Caculator

Answer 1

I am not sure if this interest rate is annual or for the given period of time. Hence I will solve it both ways.

Considering the interest rate is annual :

Rate = 1.3% per annum

Calculating the number of days between the given dates:

2nd -> 1 ->DT1 ->3.0120 -> ENTER -> Press Down Key -> DTR -> 12.1520 -> ENTER -> Press Down Key ->CPT DBD

DBD = 289 (number of days between given dates)

Rate for given days = 289 * 1.3 /365 = 1.0293%

Worth of investment:

N =1

I/y = 1.0293

PV = -2500

PMT = 0

CPT FV

FV = $2525.7329 Answer

Your investment will be worth of $2525.7329 on Dec. 15, 2020.

OR

Considering the interest rate is for 289 days:

Worth of investment:

N =1

I/y = 1.3

PV = -2500

PMT = 0

CPT FV

FV = $2532.5 Answer

Please let me know in case you have any queries and I would be happy to assist you.