Question

Mr. Jones has $410,000 in a retirement account that earns 3.85% simple interest each year. Find the amount of interest earned by this investment if it is in there for 5 years. *

Answer 1

Amount of interest earned = $78,925

Explanation:

Given:

Amount deposit = $410,000

Rate of interest = 3.85% = 0.0385

Number of year = 5 year

Find:

Amount of interest earned

Computation:

Using simple interest formula

Amount of interest earned = Amount deposit x Rate of interest x Number of year

Amount of interest earned = 410,000 x 0.0385 x 5

Amount of interest earned = $78,925