Question

The national interest rate for savings accounts is 0.04%. I put $2,000 in my savings account for 40 years. How much interest will I earn?

Answer 1

Answer: $32.25

Explanation:

Assuming this is compound interest, the value of the investment after a period of time can be calculated with the future value formula:

Value = Investment * ( 1 + rate) ^ no. of periods

Value ₄₀ = 2,000 * ( 1 + 0.04%)⁴⁰

Value ₄₀ = $2,032.25

Interest earned = Value at 40 years - Initial investment

= 2,032.25 - 2,000

= $32.25