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Simonhas$14,784inasavingsaccountthatearns2%interestperyear.Theinterestisnotcompounded.Tothenearestcent,howmuchinterestwillheearnin4months?

Question

Simon has $14,784 in a savings account that earns 2% interest per year. The interest is not compounded. To the nearest cent, how much interest will he earn in 4 months?

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Solution

To calculate the interest Simon will earn in 4 months, follow these steps:

  1. First, find out how much interest Simon earns in a year. Since the interest rate is 2%, you can calculate this by multiplying his total savings by the interest rate: 14,7840.02=14,784 * 0.02 = 295.68. This is the amount of interest Simon earns in one year.

  2. Since the interest is not compounded, it means that Simon earns the same amount of interest every month. To find out how much interest he earns in a month, divide the yearly interest by 12 (the number of months in a year): 295.68/12=295.68 / 12 = 24.64. This is the amount of interest Simon earns in one month.

  3. Finally, to find out how much interest Simon earns in 4 months, multiply the monthly interest by 4: 24.644=24.64 * 4 = 98.56.

So, to the nearest cent, Simon will earn $98.56 in interest in 4 months.

This problem has been solved

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