Question

Dirk opened up a savings account with $600. at a yearly interest rate of 5 percent that is compounded monthly, how much interest will dirk earn in six months?

Answer 1

$15.16

Step-by-step explanation:

Compound interest is when the interest you earned before, will also start earning interest. To calculate the compound interest we can use the following formula:

principal + interest = principal x (1 + rate/number of periods per year)∧time

principal + interest = $600 x (1 + 5%/12)⁶ = $600 x (1.0042)⁶ = $600 x 1.0252 = $615.16

interest = $615.16 - $600 = $15.16