To calculate the total amount of interest earned on a savings account, we can use the formula for simple interest:
\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \]
Where:
- Principal = $4,556
- Rate = 2.5% = 0.025
- Time = 7 years
Now substituting these values into the formula:
\[ \text{Interest} = 4,556 \times 0.025 \times 7 \]
Calculating this step by step:
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Calculate \( 4,556 \times 0.025 \): \[ 4,556 \times 0.025 = 113.9 \]
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Now, multiply \( 113.9 \times 7 \): \[ 113.9 \times 7 = 797.3 \]
So, the total amount of interest earned on the savings account over 7 years is $797.30.
The correct answer from your options is $797.30.
1 answer