Suppose $200 is invested in an account that earns 0.5% interest each month.?

Question

You make no withdrawals from the account and deposit no more money into the account. How much interest do you make in the second month.

Answer 1

Assuming that you actually get paid the interest monthly.

At the end of the first month you will have the original $200 plus $1 in interest (200 * 0.005)

The interest earned in the second month is based on the new value of $201, and is (201 * 0.005) = 1.005 = $1.01

You would earn $1.01 in interest.

Answer 2

You make $200 x 0.005 the first month. Take that amount and add it to the original $200. Then multiply the new total by 0.005. That will be the second month's interest.

Answer 3

You didn't say the amount is compounded monthly but I will assume it is.

The first month, int = 200*0.005 = 1
So at the end of the first month you have $201.00

The second month, int = 201*0.005 = $1.005

So in the second month you earn $1.005 of interest, not sure what you will do with the half cent.
.

Answer 4

How is your threat tolerance? A fee savings account does not lose fee. is basically grows at an extremely low fee. A municipal bond has a term of 30 years. once you purchase the bond, you agree to a fee of return (say 5% tax unfastened) and to hold the bond till adulthood. If the cost the marketplace demands will enhance (say to 6-7%), the cost of the bond decreases so as that the smart activity fee suits the marketplace. in case you do no longer sell, you do not have a loss...yet who says you will no longer could sell at it sluggish over the subsequent 30 years.

Answer 5

$2.005