Teresa has just opened a NOW account that pays 3.50 % interest. If she maintains the account at the required minimum balance of $500 for the next 12 months, how much interest will she earn?

She will earn $17.50.

Explanation:

Interest earned is the amount of interest earned on the a deposited amount in a saving amount on simple interest.

Balance in the account = $500

Interest rate = 3.5%

Interest earned = Average balance x Interest rate

Interest earned = $500 x 3.50%

Interest earned = $500 x 0.035

Interest earned = $17.50