Respuesta :
The yearly earnings for a person with $6,000 in savings at an annual interest rate of 2.0 percent would be $120 .
Earnings = Principal×Rate
Principal = $6,000
Rate = 2.0% or 0.02
Earnings=$6,000×0.02
Earnings=$120
What is Interest earnings ?
- The amount invested at a specific rate yields interest profits, which serve as compensation for taking on the borrower's risk.
- An increased risk borrower will earn more money.
- The possibility that a change in general interest rates will lower the value of a bond or other fixed-rate investment is known as interest rate risk.
- Bond prices decrease as interest rates rise and vice versa. In order to balance the more enticing rates of new bond offerings, the market price of existing bonds declines.
- The length of a fixed income security serves as a proxy for interest rate risk, with longer-term bonds being more sensitive to fluctuations in interest rates in terms of price.
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