Question

If $475 is put in the bank and each year the account earns 5% simple interest, then how much interest will be earned in ten years

Answer 1

Hi there! The formula for simple interest is prt. That means multiply the principal (initial amount) by the rate (simple interest rate) by the time (could be in months or years). In this case, we multiply 475 * 5% (0.05) to get 23.75. That's $23.75 in interest each year, but we're looking for the amount earned in 10 years. To do this, multiply 23.75 by 10. When you do, you get 237.5. There. $237.50 in interest will be earned in 10 years.