A $5000 investment at an annual simple interest rate of 4.4% earned as much interest after one year as another investment in an account that earned 5.5% annual simple interest. How much was invested at 5.5%?
The interest rate.
The interest earned will fluctuate with the interest rate and type of account. As of March 2013 interest rates, the daily interest accrued would be approximately $21,918.
ANSWER It is called "interest".
The amount of interest earned on $1,000,000 in a year depends on the interest rate and the type of account. For example, at a 1% annual interest rate, you would earn $10,000 in interest. If the rate were 5%, you would earn $50,000. Always consider whether the interest is simple or compounded, as this will also affect the total interest earned.
Interest income is considered taxable when earned. For example, if your savings account accrues interest, it is taxable at the time of accrual even if you are not utilizing the funds within the account. However, if you are accruing interest on a treasury bond that you have not yet cashed, the interest is not taxable until the bond is cashed and you receive the funds.
$74.90
The interest rate.
Interest earned in a bank account is not an investment. It is considered an income. The money that you have in the bank account that earned the interest for you is considered the investment
To record interest earned, you typically make a journal entry that credits an interest income account and debits an asset account, such as cash or accounts receivable, depending on whether the interest has been received or is accrued. For example, if you earned $100 in interest, you would debit the cash account and credit the interest income account. This ensures that your financial statements accurately reflect the income earned during the accounting period.
Well, honey, if Taylor's account balance changed by $13 on the day his bank paid interest and he wrote a check for $18, then he must have earned $31 in interest. It's simple math, darling. Just add the check amount to the change in the account balance, and there you have it.
The interest earned will fluctuate with the interest rate and type of account. As of March 2013 interest rates, the daily interest accrued would be approximately $21,918.
$98.10 in interest is earned in the following year.Year One:$1000 x 0.09 = $90$1000 + $90 = $1090Year Two:$1090 x 0.09 = $98.10
Debit cash / bankCredit interest income
Simple interest: stays the same. Compound interest: increases.
Simple interest: stays the same. Compound interest: increases.
$530.60
Compound interest increases the amount earned by adding credited interest to the principal, and interest will then be earned on that money as well. The longer the principal and interest remain in the account, the greater the earnings they will accrue.