Question

Polly has $500 in an account that earns 7% interest compounded annually.

To the nearest cent, how much INTEREST will she have in 2 years? (Hint: You are finding the amount of interest, not the total amount.)
Responses

$92.50


$572.45


$72.45


$82.50

Answer 1

The correct answer is c. I just got it right

Answer 2

answer c

Explanation:

First, converting R percent to r a decimal

r = R/100 = 7.23%/100 = 0.0723 per year,

then, solving our equation

I = 500 × 0.0723 × 2 = 72.3

I = $ 72.30

The simple interest accumulated

on a principal of $ 500.00

at a rate of 7.23% per year

for 2 years is $ 72.30