Question

A $370 savings account that earns $30.00 interest in a year has a yield of __________percent.

A) 8.11%
B) 8.65%
C) 7.72%
D) 7.89%

Answer 1

To find the yield of a savings account, divide the interest earned by the principal and multiply the result by 100 to get a percentage. For a $370 savings account earning $30 a year, the yield is 8.11% (Option A).

Step-by-step explanation:

The yield of an interest-earning savings account is calculated by taking the interest earned in a period (usually a year) and dividing it by the starting principal amount, then multiplying by 100 to get a percentage.

For a $370 savings account that earns $30.00 interest in a year, the yield can be calculated as follows:

1. Divide the interest earned by the principal: $30.00 ÷ $370 = 0.0811.
2. Multiply by 100 to convert to a percentage: 0.0811 × 100 = 8.11%.

Therefore, the savings account has a yield of 8.11% percent. The blank should be underline with the mention correct option, which is A) 8.11%.