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If you had money in a savings account earning 9% interest per annum, how much would you make in interest on a deposit of 60.00 over two years?

 Mar 21, 2021
 #1
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Since the amount earned is 9% per year, you would earn 5.4 in the first year because 60*(9/100)

 

Add that to the money that is already in your account, and you get 65.4

This tells us that after the first year, you have 65.4 dollars in your account.

 

Now, the amount you would earn in the second year is 3.924 because 65.4*(9/100)

 

Finally,

interest in first year + interest in second year = total

5.4 + 3.924 = 9.324

 

Since we are dealing with money, the smallest unit is a penny, which is the hundredth place. Rounding, you get 9.32

 

ANSWER: 9.32

 

Note: I do all my calculations by hand you might want to check the answer. 

 

Sorry if my answer is wrong. 

 Mar 21, 2021
 #3
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3.924 because 65.4*(9/100)        <=========    might check this calculation ANH .....

Guest Mar 21, 2021
 #2
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If it just SIMPLE interest:

 60 x .09 x 2 = $ 10.80

 

If the interest is COMPOUNDED annually (meaning it is added to your balance and gains interest the second year):

60 ( 1+.09)2  - 60 = ~ ~ $11.29

 Mar 21, 2021
 #4
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60 x (1+0.09)^2

= 60 x (1.09)^2

= 60 x 1.1881

= 71.286

 

71.286 rounds to 71.29.

 

71.29 - 60 = 11.29. 

 

You would make $11.29.

 Mar 21, 2021

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