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You receive an inheritance of 12,500, and you place the full amount into a bank account. The bank pays a simple interest rate of 7.5% per year. How much interest have you earned after one year? Give your answer in dollars and cents to the nearest cent

Solution

You receive an inheritance of 12, 500, and you place the full amount into a bank account. The bank pays a simple interest rate of 7.5% per year. How much interest have you earned after one year? Give your answer in dollars and cents to the nearest cent

Solution

Interest : 937.5

Solution steps

Translate the problem into an equation:

I = 12500 \cdot 0.075 \cdot 1

Simplify

I = 12500 \cdot 0.075 \cdot 1

Interest : 937.5

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