CFA Level 1: Simple Interest Calculation

Simple Interest Calculation

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Question

If you deposit $245 into an account paying 5.5% per year simple interest, how much interest will be earned after 15 months?

Answers

Explanations

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A. B. C. D. E.

E

The question only asks for the earned interest, not the total amount in the account. On the BAII Plus, press 245 x 0.055 x 15 divide 12 = to see the answer. On the

HP12C, press 245 ENTER 0.055 x 15 x 12 divide to see the answer.