Question

if the balance is $125 and the annual interest rate is 3.2 % what would the amount of annual interest be ?

Answer 1

We know, A = P (1 + r)^t

125 = P (1 + 0.032)^1

P = 125 / 1.032

P = 121.12

Amount of Annual Interest = 125 - 121.21 = 3.875

In short, Your Answer would be: $3.875

Hope this helps!