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14 December, 14:20

If Oliver withdraws $285.10 from his savings account to make the purchase, how much would he have earned in interest on that amount over five months? Round your answer to the nearest cent.

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  1. 14 December, 15:59
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    Oliver withdraws an amount of $285.10 from his saving account

    His saving account earns 1.8% annually

    The interest Oliver could have earned in five months:

    Monthly interest = Annual interest : 12

    Monthly interest = 1.8% : 12

    Monthly interest = 0.018 : 12 = 3/2000

    After five months = Principle * (1 + interest) ⁿ

    After five months = 285.10 * (1 + 0.018) ⁵

    After five months = 311.70

    Interest earned = 311.70 - 285.10 = $26.60
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