Question

Dawnie deposited $350 in a savings account earning 2% interest over 3 years.

What was the total amount of interest earned at the end of 3 years?














A.

$420











B.

$210











C.

$42











D.

$21

Answer 1

@francesco.alemanno

Answer 2

the correct equation is:
\[Earnings=Deposit_{initial}*((1+rate/100)^{years}-1)\]
in economics normally they use a first order approximation which is:
\[Earnings=Deposit_{initial}*(rate/100)*years\]
which gives
\[Earnings=350*(2/100)*3= 21\]