question on interest rates

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. 

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

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.