Question

If John deposits $525 in a savings account and his account pays an annual interest rate of 5.5% and makes no other deposits and withdrawals what is the simple interest earned for 5 years , 5 months , and 5 days

Answer 1

The amount of simple interest earned is $156.79

Explanation:

Mathematically;

Simple interest = PRT/100

From the question;

P = $525

R = 5.5%

T ; to get this, we need to make the numbers agree;

We do this by dividing number of months by 12 and number of days by 365

So 5 years, 5 months and 5 days will be;

5 + 5/12 + 5/365 = 5.43

So, using this in the simple interest calculations, we have;

S.I = (525 * 5.5 * 5.43)/100

S.I = $156.79