Question

Determine the interest earned on a 3 and 1/4 year investment of $2880 at a rate of 4.5%

Answer 1

Answer:

The interest earned is $421.2.

Step-by-step explanation:

This is a simple interest problem.

The simple interest formula is given by:

$E = P*I*t$

In which E is the amount of interest earned, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

In this question:

$P = 2880, I = 0.045, t = 3 + \frac{1}{4} = 3.25$

So

$E = P*I*t$

$E = 2880*0.045*3.25$

$E = 421.2$

The interest earned is $421.2.