Question

Tisha has $40,000 in a savings account that earns 15% annually. The interest is not compounded. How much interest will she earn in 9 months?

Answer 1

The amount of interest she will earn in 9 months is $4,500

Here, we want to calculate the value of the interest that is not compounded in 9 months

If the interest is not compounded, then, it has to be simple

The forrmula for simple interest is given as follows;

`I\text{ = }(PRT)/(100)`

Here, P is the principal which is the amount in the savings account given as $40,000 in the question

R is the annual interest rate = 15%

T is 9 months; to use this, we convert to years and we have it as 9/12 = 3/4

We insert these values into the equation as follows;

`\begin{gathered} I\text{ = }(40,000*15*(3)/(4))/(100) \\ \\ I\text{ = \$4,500} \end{gathered}`