Question

An employee puts $3,000 into a retirement fund that offers 7% interest compounded annually. The employee makes no other deposits or withdrawals. Which amount is closest to the interest that the employee will have earned after 4 years?

Answer 1

$840

Explanation:

Given data

Principal = $3000

Rate= 7%

Time= 4 years

The expression for the simple interest is

SI= PRT/100

substitute

SI= 3000*7*4/100

SI= 30*7*4

SI= $840

Hence the interest is $840