Question

Susan has $800 in a savings account that earns 6% annually. If the interest is not compounded, how much interest will she earn in 5 years?
A) $30.00
B) $48.00
C) $240.00
Eliminate
D) $480.00

Answer 1

Answer:

The correct option is C.

Step-by-step explanation:

It is given that Susan has $800 in a savings account that earns 6% annually and the interest is not compounded.

It means Susan received simple interest.

Formula of simple interest:

$I=\frac{P\times r\times t}{100}$

Where P is principal amount, r is rate of interest in percentage and t is time in years.

$I=\frac{800\times 6\times 5}{100}$

$I=240$

The amount of interest is $240.00. Therefore option C is correct.