To calculate the amount of interest on $2,000.00 for 4 years, we need to use the given interest rate or APR (Annual Percentage Rate) and the compounding period.
Simple Interest:
If the interest is calculated using simple interest, the formula to calculate the interest is:
Interest = Principal × Rate × Time
In this case, the principal is $2,000.00, the time is 4 years, and the rate is not provided. Please provide the rate so that I can calculate the simple interest.
Compound Interest:
If the interest is compounded daily at an APR of 2.25%, we can use the compound interest formula:
Compound Interest = Principal × (1 + Rate/365)^(365 × Time)
In this case, the principal is $2,000.00, the time is 4 years, and the rate is 2.25% or 0.0225.
Let's calculate the compound interest:
Compound Interest = $2,000.00 × (1 + 0.0225/365)^(365 × 4)
Compound Interest = $2,000.00 × (1 + 0.00006164)^(1,460)
Compound Interest $2,000.00 × (1.00006164)^(1,460)
Compound Interest $2,000.00 × 1.094171
Using the given information from the Monthly Interest Table, we find that the interest for each $1.00 invested is $1.094171.
Therefore, the approximate amount of interest on $2,000.00 for 4 years, compounding daily at 2.25% APR, is:
Interest $2,000.00 × 1.094171
Interest $2,188.34
The amount of interest is approximately $2,188.34.
Added 7/6/2023 12:19:42 PM
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