Question

Clarence has $48,143 in a savings account. The interest rate is 11% per year and is not compounded. How much interest will he earn in 2 years?

Answer 1

hello

since the interest is not compounded, then it's calculated as a simple interest

let's get the data out of the question

principal = $48,143

rate = 11% = 0.11

time = 2 years

the formula of simple interest is given as

$\begin{gathered} s\mathrm{}i=p(1+rt) \\ p=\text{ principal} \\ r=\text{ rate} \\ t=\text{time} \\ s\mathrm{}i=48143(1+0.11\times2) \\ s\mathrm{}i=48143(1+0.22) \\ s\mathrm{}i=48143\times1.22 \\ s\mathrm{}i=58734.46 \end{gathered}$

the value of his savings would be $58734.46 at the end of two years