Hayleyhas$86,280inasavingsaccountthatearns14%interestperyear.Theinterestisnotcompounded.Tothenearestcent,howmuchinterestwillsheearnin8months?
Question
Hayley has $86,280 in a savings account that earns 14% interest per year. The interest is not compounded. To the nearest cent, how much interest will she earn in 8 months?
Solution
Sure, here's how you can calculate the interest:
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First, identify the principal, rate of interest, and time. In this case, the principal (P) is $86,280, the rate of interest (r) is 14% per year, and the time (t) is 8 months.
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Convert the rate of interest from a percentage to a decimal by dividing by 100. So, r = 14/100 = 0.14.
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Convert the time from months to years, since the rate of interest is given per year. There are 12 months in a year, so t = 8/12 = 0.67 years.
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Use the simple interest formula, I = Prt, where I is the interest. Substituting the values we have, I = $86,280 * 0.14 * 0.67.
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Calculate the product to find the interest. I = $8,137.04.
So, Hayley will earn approximately $8,137.04 in interest in 8 months.
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