Loretta deposited $429 in a new savings account at Henry County Bank and Trust. She made no other deposits or withdrawals. After 6 months, the interest was computed at an annual rate of 6 .25%. How much simple interest did her money earn?
Interest can be calculated by the following equation. Interest = Principal x rate p.a x time Now we can sub the numbers in. Interest = 429 x (6.25% / 12) x 6 Note that u have to divide the annual rate by 12, which is the number of months in a year, as the amount time in this question is counted by months Interest = 429 x (6.25% / 12) x 6 Interest = $ 13.406249914 Round up if needed.
