Question

Jessica won $800,000 in a state lottery. After paying $320,000 in taxes, she invested the remaining money in a savings account at 4.25% interest. how much interest will she receive from her investment each year

Answer 1

After paying taxes, Jessica has $480,000 to invest at a 4.25% interest rate. The simple interest formula shows she will receive $20,400 as annual interest from her investment.

Step-by-step explanation:

Jessica won $800,000 in a state lottery and paid $320,000 in taxes. This leaves her with $480,000 to invest in a savings account at an interest rate of 4.25%. To calculate the annual interest she will receive, we use the simple interest formula:

Interest = Principal × Rate × Time

Where:

• Principal is the starting amount of money ($480,000 in this case),
• Rate is the annual interest rate (4.25%, or 0.0425 as a decimal),
• Time is the number of years the money is invested (1 year in this case).

Using the formula, the calculation will be:

Interest = $480,000 × 0.0425 × 1 = $20,400

So Jessica will receive $20,400 from her investment as interest each year.

Answer 2

$7,446,000

800,000-320,000=480,000(.0425) gives you interest made daily then multiply by 365