Question

Maya has $63,120 in a savings account that earns 2% interest per year. The interest is not compounded. How much interest will she earn in 5 years?

Answer 1

we can use the next formula in order to calculate the interest

`M=C(1+i)^n`

M is the quantity of the savings plus the interest

C is the initial capital

i is the compound interest rate

n is the number of periods during which compound interest is compounded

`M=63120(1+0.02)^5=69689.58`

the interest she will earn is

M-C= 69689.58-63120=6569.58