Intro You make a one-time investment of $400 and leave it for 5 years, earning an annual interest rate of 7%. Part 1 How much interest will you have earned after 5 years? 0+ decimals Submit Part 2 If you leave the entire amount in your account for another 5 years and earn the same interest rate, how much interest will you earn over the second 5-year period?

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.