## When it goes on sale for $1,600, Mikah buys a new plasma television that is valued at $1,800. He takes $300 from his savings account to use as a down payment and finances the rest. Choose the true statement. a. Mikah’s assets increased by $1,300. b. Mikah’s assets increased by $1,500. c. Mikah’s assets increased by $1,600. d. Mikah’s assets increased by $1,800.

January 27, 2020// Blog//

Hey there! Hello!

For this problem, take the interest equation into account: . is the interest, is the principal amount that will be invested, is the rate of interest per year (expressed in decimal form, where 90% is 0.9, for example), and is the amount of time. Let’s solve the amount of money gained from interest after one year:

That means 2 dollars are earned after one year. If $102 is the total after one year, and interest is earned yearly, it surely can’t be $102 at the end of five years. So, let’s solve for five years this time:

So, at the end of five years, $110 will be earned. This is more than $102 dollars, meaning that your first answer choice is the correct one.

Hope this helped you out! Feel free to ask me any additional questions you may have. 🙂