Isabella has $90,000 in a savings account that earns 11 3/8% annually. The interest is not compounded. To the nearest cent, how much interest will she earn in 3 years?
Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.
Round your answer to the nearest cent.
To calculate the interest Isabella will earn in 3 years, we can use the formula:
[ i = prt ]
Where:
– ( i ) is the interest earned,
– ( p ) is the principal (starting amount) = $90,000,
– ( r ) is the interest rate expressed as a decimal = ( 11 frac{3}{8}% = frac{91}{8} % = 0.011375 ) (to convert percentage to decimal, divide by 100),
– ( t ) is the time in years = 3.
Now, plug the values into the formula:
1. Convert the interest rate:
[ 11 frac{3}{8}% = 11.375% = frac{11.375}{100} = 0.11375 ]
2. Calculate the interest:
[
i = 90,000 times 0.11375 times 3
]
[
i = 90,000 times 0.11375 times 3 = 30,637.50
]
Therefore, to the nearest cent, Isabella will earn $30,637.50 in interest over 3 years.
Great job! If you have more questions, feel free to ask!