Question

Natalie has $300 in a savings account that earns 15% interest per year. How much interest will she earn in 4 years?

Answer 1

If Natalie had simple interest: $180

If Natalie had compound interest: $224.70

Explanation:

Simple Interest.

P(1 +rt)

300(1 + 0.15 x 4) = 480

480 - 300 = 180

Compound interest.

P(1 + r/n)^nt

300(1 + 0.15)^4 = 524.70

524.70 - 300 = 224.70

Answer 2

Answer: 480

Explanation:

300 In Account

15% of 300 = 45

45x4= 180

300+180= 480