Question

After 2 1/2 years, Sam has earned how much in interest on $3,500 in a mutual fund account that earns 8% annually?

A. $17,500
B. $7,500
C. $700
D. $2,625

Answer 1

Sam has earned $700 in interest after 2 1/2 years.

Step-by-step explanation:

To calculate the amount of interest earned, we can use the formula:

Interest = Principal * Rate * Time

Given that the principal is $3,500 and the interest rate is 8% annually, we can calculate:

Interest = $3,500 * 0.08 * 2.5 = $700

Therefore, Sam has earned $700 in interest after 2 1/2 years.