Step-by-step explanation:
To calculate the total interest Mary earned on her investment, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial investment).
- r is the annual interest rate (in decimal).
- n is the number of times interest is compounded per year.
- t is the time the money is invested for, in years.
In this case:
- P = $1200
- r = 3.6% or 0.036 (as a decimal)
- n = 1 (interest compounded annually)
- t = 2 years
Substitute the values into the formula:
A = 1200(1 + 0.036/1)^(1*2)
= 1200(1 + 0.036)^2
= 1200(1.036)^2
≈ 1200(1.073696)
≈ 1288.44
The total interest earned would be the final amount minus the principal amount:
Total Interest = $1288.44 - $1200
≈ $88.44
So, Mary earned approximately $88.44 in interest on her investment.
