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Question

An elite private college receives large donations from successful alumni. The account that holds these donations now has $955 million. How much would the account earn in 1 year of simple interest at a rate of 2.33%? Round to the nearest cent.

Solution

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Answered 1 year ago

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1 of 2An elite private college receives large donations from successful alumni. The account that holds these donations now has $955$ million USD.We have to calculate,how much would the account earn in 1 year of simple interest at a rate of $2.33\%$? To calculate interest we will use the equation,

$\begin{align*} I=Ptr \end{align*}$

where is $P$ principal, $r$ interest rate and $t$ number of years, so we get,

$\begin{align*} I=955 000 000\cdot 0.0233\cdot 1=21965000\,\,\text{USD} \end{align*}$

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