How Should the Johnsons Manage Their Cash?

In January, Harry and Belinda Johnson had $10,660 in monetary assets: $1,100 in cash on hand; $1,200 in a statement savings account at First Credit Union earning 1.0 percent interest; $4,000 in a statement savings account at the Far West Savings Bank earning 1.1 percent interest; $2,260 in Homestead Credit Union earning a dividend of 1.3 percent; and $2,100 in their regular checking account at First Credit Union earning 1 percent.

If the Johnsons could put most of their monetary assets ($10,660) into a money market account earning 2.4 percent, how much would they have in the account after one year? Round your answer to the nearest dollar.

To determine how much the Johnsons would have in the account after one year if they put all their monetary assets ($10,660) into a money market account earning 2.4% interest, we can use the formula for simple interest (since compound interest isn't specified here):

\[
A = P(1 + r)
\]

Where:
- $ A $ is the amount in the account after one year.
- $ P $ is the principal (initial deposit), which is $10,660.
- $ r $ is the annual interest rate, which is 2.4% or 0.024.

Substitute the values into the formula:

\[
A = 10,660(1 + 0.024)
\]
\[
A = 10,660 \times 1.024
\]
\[
A = 10,916.18
\]

After rounding to the nearest dollar, the Johnsons would have **$10,916** in the money market account after one year.

### Do you want details or have any questions?
Here are 5 related questions to expand the information:
1. What is the difference between simple interest and compound interest?
2. How would the amount change if the interest was compounded monthly?
3. What factors should be considered when choosing a savings account or money market account?
4. How do money market accounts compare to other investment vehicles like stocks or bonds?
5. What other strategies can the Johnsons use to manage their monetary assets efficiently?

**Tip:** For higher returns, it's worth looking into accounts that offer compound interest rather than just simple interest.

How Should the Johnsons Manage Their Cash? In January, Harry and Belinda Johnson had $10,660 in monetary assets: $1,100 in cash on hand; $1,200 in a statement savings account at First Credit Union earning 1.0 percent interest; $4,000 in a statement savings account at the Far West Savings Bank earning 1.1 percent interest; $2,260 in Homestead Credit Union earning a dividend of 1.3 percent; and $2,100 in their regular checking account at First Credit Union earning 1 percent. If the Johnsons could put most of their monetary assets ($10,660) into a money market account earning 2.4 percent, how much would they have in the account after one year? Round your answer to the nearest dollar.

Learn how to calculate the simple interest on $10,660 in a money market account with a 2.4% interest rate. This step-by-step guide walks through the formula and solution, providing insights into percentage calculations and simple interest for managing monetary assets. Suitable for Grades 10-12.

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