Consider a $2,000 deposit earning 6 percent interest per year for five years. How much total interest is earned on the original deposit (excluding interest earned on interest)?
A) $60.00
B) $76.45
C) $600.00
D) $676.45

Question

Quizplus · Accepted Answer

The interest earned each year on the original deposit is 6% of $2,000, which is $120. Over five years, this amounts to $120 * 5 = $600. This calculation does not include interest on interest, only on the original deposit.

Consider a $2,000 Deposit Earning 6 Percent Interest Per Year