Question

Suppose a principal amount of $2079 were invested into a simple interest account that pays an annual rate of 2.31% then the amount of interest earned at the end of 14 years would be how much

Answer 1

The amount of interest earned at the end of 14 years would be $672.3486

Explanation:

This is a simple interest problem.

The simple interest formula is given by:

`E = P*I*t`

In which E are the earnings, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

In this problem, we have that:

`P = 2079, I = 0.0231, t = 14`

So

`E = 2079*0.0231*14 = 672.3486`

The amount of interest earned at the end of 14 years would be $672.3486