Isabel put $4,000 into a saving account that pays interest monthly at a simple-interest rate of 2.5% per year. If she takes the interest interest out of the account each month, how much money should she expect to earn after 6 months?
Isabel put $4,000 into a saving account that pays interest monthly at a simple-interest rate of 2.5% per year. If she takes the interest interest out of the account each month, how much money should she expect to earn after 6 months?
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Answer:
$49.98
Step-by-step explanation:
The interest credited to Isabel’s account each month is …
I = Prt
I = $4000·(0.025)(1/12) = $8.33
If she withdraws that amount each month, the original balance is restored, and she will earn the same amount the next month.
Isabel’s total earnings in 6 months will be …
$8.33 · 6 = $49.98