$500 at 6% interest after 90 days would be $507.50 in an account. Right?
Yes
To calculate the interest earned on an investment, you need to use the formula:
Interest = Principal x Rate x Time
In this case, the principal amount is $500, the interest rate is 6% (which needs to be converted to a decimal, so 6% becomes 0.06), and the time period is 90 days (which needs to be converted to a fraction of a year, so 90/365).
Using the formula,
Interest = $500 x 0.06 x (90/365)
= $7.67 (rounded to two decimal places)
To find the total amount in the account, you need to add the interest earned to the principal amount:
Total = Principal + Interest
= $500 + $7.67
= $507.67.
Therefore, with an initial investment of $500 at 6% interest for 90 days, the account would have a total of $507.67, not $507.50.