SOLUTION: Ann has her money in a bank account that pays her 2.0% interest each year on the amount of money held in her account. At the end of each year, the bank sends Ann a check for the i

Question 1126363: Ann has her money in a bank account that pays her 2.0% interest each year on the amount of money held in her account. At the end of each year, the bank sends Ann a check for the interest she has earned and she spends it.
Ann has kept $1450 in her bank account for the past five years.
What is the total amount of interest, in dollars, that the bank has sent to Ann over the past five years?

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
this winds up being simple interest.

her balance was 1450 to start and is still 1450.

she was drawing the interest only.

2% of 1450 = .025 * 1450 = 29.00.

the total interest that the bank sent to her for 5 years is 5 * 29 = $145.00.

the formula would be i = p * r * n

p is the principal
r is the interest rate per time period.
n is the number of time periods.

for her, the formula becomes i = 1450 * .02 * 5 = $145.00

the bank balance never changes since the interest is not deposited into the account, but sent to her.

or, quite possibly, it is credited to the acocunt and immediately withdrawn to be sent to her.

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