Question

Raj won $900,000 in a regional

lottery. After paying $350,000 in taxes, he
invested the remaining money in a savings
account at 4.25% simple interest. How
much money is in the account if Raj makes
no deposits or withdrawals for two years?

Answer 1

$596,750

Explanation:

900,000 - 350,000 = 550,000

550,000 * .0425 interest = 23,375 gained per year

23,375 * 2 years = 46,750 total interest gained in two years

46,750 + 550,000 = $596,750