Question

Jonathan has $44,200 in a saving account. The interest rate is 7% per year and is not compounded. How much interest will he earn in 3 years?

Answer 1

The interest that he gains after 3 years is $9282.

Explanation:

• Step 1: Given details are Principal amount (P) in bank = $44200, Interest rate, R = 7%, Time, T = 3 years. Since interest is not compounded, we have to calculate simple interest.

• Step 2: Formula for Simple Interest (SI) = PRT/100

⇒ SI = (44200 × 7 × 3)/100

⇒ SI = 442 × 7 × 3

⇒ SI = $9282