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11 December, 23:31

You deposited money in a savings account paying 4% simple interest per year. The first year, you earned $75 in interest. how much interest will you earn during the following year?

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  1. 12 December, 00:03
    There's simple interest and there's also compound interest.

    the difference is that, with simple interest, what you earn is a percentage of the "original amount you deposited", so if you deposited say 1000 and you earn 10% APR, you only get 100 bucks a year, 1st, 2nd, 3rd 20th year, no matter what year it may be, is always 10% of that original 1000.

    so, in short, if you earned 75 bucks in the first year, well, for simple interest, that won't change for any subsequent year.
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