A customer has a balance of $1,350. Interest is paid at the end of 12 months. Assuming the balance remains at $1,350 for all 12 months, how much interest will be earned after 12 months if the interest rate on the account is 5.5%?
looks like a "simple interest" case
I = 1350 * .055 * 1 = .....
74.25
To calculate the interest earned after 12 months, you'll need to multiply the balance by the interest rate.
The formula to calculate interest is:
Interest = Balance * Interest Rate
In this case, the balance is $1,350 and the interest rate is 5.5%.
So, to calculate the interest earned after 12 months, you would use the following formula:
Interest = $1,350 * 0.055
Multiply $1,350 by 0.055:
Interest = $74.25
Therefore, the customer will earn $74.25 in interest after 12 months if the interest rate on the account is 5.5%.