Cameron designates 10% of his monthly earnings as charitable contributions. After deducting this amount, he deposits 5% of the remaining amount into a money market account earning 2%. If Cameron’s monthly earnings are $4,800 what amount interest will he earn on his deposit each month?
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To find the amount of interest Cameron will earn on his deposit each month, we need to follow these steps:
1. Calculate the amount Cameron designates for charitable contributions:
Charitable contribution = 10% of monthly earnings
Charitable contribution = (10/100) * 4800
Charitable contribution = $480
2. Calculate the remaining amount after deducting the charitable contribution:
Remaining amount = Monthly earnings - Charitable contribution
Remaining amount = $4800 - $480
Remaining amount = $4320
3. Calculate the amount Cameron will deposit into the money market account:
Amount deposited = 5% of the remaining amount
Amount deposited = (5/100) * $4320
Amount deposited = $216
4. Calculate the interest earned on the deposit each month:
Interest earned = Amount deposited * Interest rate
Interest earned = $216 * 2%
Interest earned = $216 * (2/100)
Interest earned = $4.32
Therefore, Cameron will earn $4.32 in interest on his deposit each month.