Question

George’s restaurant deposited $5000 into a savings account. The account pays 3.5% simple interest on the annual basis. If no money is added or the withdrawn from the account how much interest will the restaurant earned after 28 months

Answer 1

To calculate the amount of interest the restaurant earned after 28 months, we need to use the formula I = Prt, where I is the interest, P is the principal amount (the amount initially deposited), r is the rate of interest (in decimal form), and t is the time period (in months).

Using this formula, we get: I = 5000*0.035*28 = 4200. Therefore, the restaurant will have earned $4200 in interest after 28 months.

Answer 2

the restaurant will earn $406.25 in interest after 28 months.

Explanation:

The first step is to calculate the annual interest rate. Since the account pays 3.5% simple interest on an annual basis, the annual interest rate is 0.035.

Next, we need to calculate the interest earned for 28 months. Since simple interest is being used, we can use the formula:

I = Prt

where I is the interest earned, P is the principal (the initial deposit), r is the annual interest rate, and t is the time in years.

Converting 28 months to years, we get:

t = 28/12 = 2.3333...

Rounding this to 2 decimal places, we get t ≈ 2.33 years.

Substituting the given values into the formula for simple interest, we get:

I = 50000.0352.33

Simplifying this expression, we get:

I ≈ $406.25

Therefore, the restaurant will earn $406.25 in interest after 28 months.