1,531 views
26 votes
26 votes
Clarence has $48,143 in a savings account. The interest rate is 11% per year and is not compounded. How much interest will he earn in 2 years?

User Kevin Montrose
by
2.7k points

1 Answer

28 votes
28 votes

hello

since the interest is not compounded, then it's calculated as a simple interest

let's get the data out of the question

principal = $48,143

rate = 11% = 0.11

time = 2 years

the formula of simple interest is given as


\begin{gathered} s\mathrm{}i=p(1+rt) \\ p=\text{ principal} \\ r=\text{ rate} \\ t=\text{time} \\ s\mathrm{}i=48143(1+0.11*2) \\ s\mathrm{}i=48143(1+0.22) \\ s\mathrm{}i=48143*1.22 \\ s\mathrm{}i=58734.46 \end{gathered}

the value of his savings would be $58734.46 at the end of two years

User DavidNg
by
3.1k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.