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Mason earns $70,000 per year and puts 7% of his earnings into a savings account. What is the total amount in Mason's account after 1 year if the interest rate is 3%?

 A. $147
B. $72,100
C. $5,047
 D. $2,100

2 Answers

4 votes
The answer is B. $5,047.
User Caleb Brinkman
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5 votes

Annual income of Mason is 70,000 dollars.

He saves 7% of his annual earnings into a saving account.

So, his savings would be 7% of 70,000 = 0.07 x 70,000 = 4,900 dollars.

The saving account gives an interest rate of 3% per annum.

So the interest accrued on 4900 dollars over the year would be 3% of 4,900 = 0.03 x 4,900 = 147 dollars.

Total amount in the saving account would be sum of principal amount and interest accrued.

Total balance = principal amount + interest accrued.

Total balance = 4900 + 147 = 5,047 dollars.

Hence, option C is correct i.e. 5,047 dollars.

User Coyo
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5.3k points