find the amount of interest in the first year the amount earned in the second year and the total on deposit at the end of the second year.
25. $100 at 3.25%
To find the amount of interest earned in the first year, we use the simple interest formula:
Interest = Principal x Rate x Time
For the first year, the principal is $100, the rate is 3.25%, and the time is 1 year. So we have:
Interest = $100 x 0.0325 x 1
Interest = $3.25
For the second year, we add the interest earned in the first year to the principal:
New Principal = $100 + $3.25 = $103.25
Now we calculate the interest earned in the second year with the new principal:
Interest = $103.25 x 0.0325 x 1
Interest ≈ $3.3556
At the end of the second year, we add the interest earned in the second year to the new principal to find the total on deposit:
Total on deposit = $103.25 + $3.3556 ≈ $106.61
So, the amount of interest in the first year is $3.25, the amount earned in the second year is about $3.36, and the total on deposit at the end of the second year is about $106.61.