Question

Steve opens a bank account with a simple annual interest rate of 5%. After four years, how much interest will Steve earn on an initial deposit of $800?
$160
$140
$60
$40

Answer 1

Steve will earn $160 interest after four years ⇒ 1st answer

Step-by-step explanation:

The formula of the simple interest is I = Prt, where

• P is the initial deposit
• r is the annual rate in decimal
• t is the time of investment

∵ Steve opens a bank account with a simple annual interest rate of 5%

∴ r = 5% = 5 ÷ 100 = 0.05

∵ His initial deposit is $800

∵ He will put the money for four years

∴ t = 4

- Substitute all these values in the formula above

∵ I = 800(0.05)(4)

∴ I = 160

Steve will earn $160 interest after four years

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Answer 2

Answer:

$160

Step-by-step explanation:

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