Question

(a) Madeline deposited $6,000 into a 3-month fixed deposit which pays simple interest. If she receives a total amount of $6,013.50 at the end of the 3 months, what is the rate of interest per annum?

(b) Another bank offers an interest rate of 0.6% per annum, compounded monthly. What would be the total amount that Madeline receives, correct to the nearest dollar, at the end of 3 months if she were to put the $6,000 in this bank?

Solution