Question

Maria's abuela gave her $2000.00 for her quinceañera under the condition that she had to deposit it in a savings account for 42 months. How much interest will she have if the account earns 7.8% per annum simple interest?

Answer 1

$ 546.00

Explanation:

Simple Interest = P x r x t

where t = number of years

r = interest rate per year as a decimal

P = amount invested(deposit)

We are given that r = 7.8% per year = 7,8/100 = 0.078

However, since this is the yearly interest, the monthly interest = 0.078/12

The time period is 42 months

Initial deposit = $2,000

Therefore interest
I = 2000x (0.078/12) x 42 = $ 546.00