Interest-on-Interest Consider a $1,000 deposit earning 7 percent interest per year for four 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 calculation for total interest earned on the original deposit is:
Year 1: $1,000 x 7% = $70
Year 2: $1,000 x 7% = $70
Year 3: $1,000 x 7% = $70
Year 4: $1,000 x 7% = $70

Total interest earned = $70 + $70 + $70 + $70 = $280 (excluding interest earned on interest)

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