Question

Chase deposits $8,825.05 into a savings account that pays a simple annual interestrate of 4.23%. How much interest will he earn after 6 years? Round answer to thehundredths place. If answer doesn't have a hundredthsplace then include zeros sothat it does.

Answer 1

Simple Interest

The interest earned by an investment P for t years at an annual rate r is calculated as follows:

I = P.r.t

Chase deposits P = $8,825.05 into a savings account that pays r = 4.23% simple interest for t = 6 years.

Before applying the formula, convert the interest rate to decimal by dividing by 100:

r = 4.23% = 4.23/100 = 0.0423

Now calculate the interest earned:

I = $8,825.05 * 0.0423 * 6

I = $2,239.80

Chase will earn $2,239.80 interest