The annual interest paid on the account is $75
How to determine the annual interest
The formula for determining annual interest is given as;
Interest = PRT/100
where;
- P is the principal amount = $1000
- R is the rate = 7. 5%
- T is the time = 1 year, since it's an annual payment
Substitute the values
Annual Interest = 1000 × 7. 5 × 1/ 100
Annual interest = 7500/ 100
Annual interest = $75
Thus, the annual interest paid on the account is $75
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