Richard McLean wants to invest $3,000 in an account paying 5.25 percent compounded quarterly. What is the interest on interest after four years?
A) $695.98
B) $65.98
C) $630.00
D) $157.50

Question

Quizplus · Accepted Answer

The interest on interest is calculated by subtracting the simple interest from the compound interest. The compound interest is $695.98, and the simple interest is $630.00, so the interest on interest is $695.98 - $630.00 = $65.98.

Richard McLean Wants to Invest $3,000 in an Account Paying