Question

Arnold Ackerman deposits $870 in a savings account at Home City Bank. The account pays an annual interest rate of 7 percent. He makes no other deposits or withdrawals. After three months the interest is calculated. How much simple interest does his money earn?

Answer 1

Answer: $15.23

Explanation:

$870 x ((7% / 12 months) x 3 months)

= $870 x 0.005833 x 3

= $15.23