Question

Nina deposit $3400 into a saving account that pays a simple annual interest rate of 2.2%.
How much interest will she earn after 3 months?
A) $1.87
B)$18.70
C)$22.44
D) 224.40

Edwin deposited money into a savings account that pays a simple annual interest rate of 1.4%. He earned $24.50 in interest after 5 years.
How much did he deposit?
A) 122.50
B) 350.00
C) 875.00
D) 1750.00

Answer 1

Answer:

1). Annual Simple Interest for Nina :

Principal = $3400

Rate = 2.2%

        = 0.022

Time = 3 months

$Time=\frac{3}{12}=0.25\text{ years}$

Now, Simple interest is given by the formula = Principal × Rate × Time

⇒ Simple Interest = 3400 × 0.022 × 0.25

⇒ Simple Interest = $ 18.70

Hence, The correct option is B). $18.70

2). Annual Simple Interest for Edwin :

Simple Interest = $24.50

Rate = 1.4%

        = 0.014

Time = 5 years

Now, Simple interest is given by the formula = Principal × Rate × Time

⇒ 24.50 = Principal × 0.014 × 5

⇒ 24.50 = Principal × 0.07

⇒ Principal = $350

Hence, The correct option is B). $350.00