austin invested $2400 in each of his savings accounts. account A pays 3.5% simple interest. account b pays 3.5% compound interest, with interest compunded annually ( at the end of each year). calculate the amount of interest that austin will earn on his investment in account a after 2 years
To calculate the amount of interest that Austin will earn on his investment in Account A after 2 years, we use the formula for simple interest:
Simple Interest = Principal x Rate x Time
The principal is the initial investment, which is $2400.
The rate is 3.5% expressed as a decimal, which is 0.035.
The time is 2 years.
So, the interest earned in Account A after 2 years is:
Simple Interest = $2400 x 0.035 x 2
Simple Interest = $168
Therefore, Austin will earn $168 in interest on his investment in Account A after 2 years.