To calculate the total interest earned by the end of the third month, we first need to determine the monthly interest rate. We can do this by dividing the annual interest rate by 12 (the number of months in a year).
Annual Interest Rate = 3.55%
Monthly Interest Rate = 3.55% / 12 = 0.2967%
Next, we can calculate the interest earned for each month using the following formula:
Monthly Interest Earned = (Principal amount) x (Monthly Interest Rate)
Month 1:
Monthly Interest Earned = $3,260.00 x 0.002967 = $9.66
Month 2:
New Principal = $3,260 + $9.66 = $3,269.66
Monthly Interest Earned = $3,269.66 x 0.002967 = $9.71
Month 3:
New Principal = $3,269.66 + $9.71 = $3,279.37
Monthly Interest Earned = $3,279.37 x 0.002967 = $9.73
Total Interest Earned by the end of the third month = $9.66 + $9.71 + $9.73 = $29.10
Therefore, the total interest earned by the end of the third month is $29.10.
You save $3,260.00 in a savings account earning a 3.55% APR compounded monthly. How much is the total interest earned by the end of the third month?
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