Question

$300 at 6.6% for 2 years

Answer 1

Simple Interest

An initial investment (or principal P) in a financial institution for t years at a rate r will have a final value of:

$FV=P\mleft(1+r\cdot t\mright)$

The initial investment is P = $300 for t = 2 years at a rate of r = 6.6% = 0.066 will have a final value of:

$\begin{gathered} FV=300(1+0.066\cdot2) \\ FV=300\cdot1.132 \\ FV=339.60 \end{gathered}$

The interest earned is;

$\begin{gathered} I=FV-P \\ I=339.60-300 \\ I=39.60 \end{gathered}$

The interest is $39.60