Interest-on-Interest Consider a $1,000 deposit earning 7 percent interest per year for 4 years. How much total interest is earned on the original deposit (excluding interest earned on interest)?
A) $28.00
B) $30.00
C) $280.00
D) $310.00

Question

Quizplus · Accepted Answer

The total interest earned on the original deposit (excluding interest earned on interest) can be calculated as follows:

Year 1: $1,000 x 0.07 = $70 
Year 2: $1,000 x 0.07 = $70 
Year 3: $1,000 x 0.07 = $70 
Year 4: $1,000 x 0.07 = $70

Adding up the interest earned in each year, we get:

$70 + $70 + $70 + $70 = $280

Therefore, the correct answer is choice C.

Interest-On-Interest Consider a $1,000 Deposit Earning 7 Percent Interest Per