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You deposit $600 in a bank account with an annual interest rate of 4%. How much interest is earned over the course of 18 months?

a. $36
b. $48
c. $72
d. $96

User Csq
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1 Answer

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Final answer:

To calculate the interest earned over the course of 18 months on a $600 deposit with a 4% annual interest rate, divide the annual interest by 12 months and multiply it by 18 months.

Step-by-step explanation:

To calculate the interest earned over the course of 18 months, we first need to calculate the annual interest. The annual interest rate is 4%, which means that for every dollar deposited, it will earn 4 cents in interest each year. So for an initial deposit of $600, the annual interest earned would be 600 * 0.04 = $24.

Since we want to calculate the interest earned over 18 months, we need to divide the annual interest by 12 months and multiply it by 18 months. So the interest earned over 18 months would be 24 / 12 * 18 = $36.

Therefore, the correct answer is option a. $36.

User Badsyntax
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