Sue deposited $1,850 in a savings account. How much would she earn
in three years if the bank paid 6.75% simple interest?
a. $124.88
b. $374.63
c. $249.75
d. $2,224.63
To solve this problem, we can use the formula for simple interest:
I = P * r * t
where I is the interest earned, P is the principal (the amount deposited), r is the interest rate, and t is the time (in years).
Plugging in the given values, we get:
I = 1850 * 0.0675 * 3
I = 372.38
Therefore, Sue would earn $372.38 in three years. However, the answer choices are all rounded to two decimal places, so we need to round our answer as well. Rounding to the nearest cent, we get:
$372.38 ≈ $372.39
Therefore, the closest answer choice is (b) $374.63.