Consider a $500 deposit earning 5 percent interest per year for five years. How much total interest is earned on the original deposit (excluding interest earned on interest)?

Question

Quizplus · Accepted Answer

The interest earned each year on the original deposit is 5% of $500, which is $25. Over five years, this amounts to $25 * 5 = $125. This calculation excludes interest earned on interest, focusing only on the original deposit.

Consider a $500 Deposit Earning 5 Percent Interest Per Year