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$400 is placed in an account earning an annual interest rate
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08 Oct 2020, 04:37
08 Oct 2020, 04:37
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Question Stats:
79% (01:15) correct
20% (01:26) wrong based on 79 sessions
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$400 is placed in an account earning an annual interest rate of 6%. If the account is compounded annually, how much more interest is earned in the second year than in the first?
A. $1.22
B. $1.33
C. $1.43
D. $1.44
E. $1.54
A. $1.22
B. $1.33
C. $1.43
D. $1.44
E. $1.54
Re: $400 is placed in an account earning an annual interest rate
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08 Oct 2020, 07:32
08 Oct 2020, 07:32
1
first year the interest will be = 400*1.06=424
interest is 424-400=24
for second year it was compounded so =424*1.06=449.44
interest is 449.44-424=25.44
difference in interest got= 25.44-24=1.44
so 1.44 more interest
option D is correct
interest is 424-400=24
for second year it was compounded so =424*1.06=449.44
interest is 449.44-424=25.44
difference in interest got= 25.44-24=1.44
so 1.44 more interest
option D is correct
Re: $400 is placed in an account earning an annual interest rate
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16 Apr 2022, 13:21
16 Apr 2022, 13:21
1
Piece of cake....
400 x 6%=24
Additional interest is 24x6%=1.44
400 x 6%=24
Additional interest is 24x6%=1.44
