Question

Felisa has $58,400 in a savings account that earns 9% interest per year. How much interest will she earn in 3 months

Answer 1

For an initial amount P in a savings account with annual interest r, after t months the total interest earned is given by:

`I=P\lbrack(1+r)^{(t)/(12)}-1\rbrack`

For P = $58400, r = 0.09 and t = 3, we have:

`\begin{gathered} I=58400\lbrack1.09^{(1)/(4)}-1\rbrack \\ I=\text{ \$1271.85} \end{gathered}`