Question

You earn $10.00hr. you invest $4,000.00 at an interest rate of 5% apr for a year. how much interest did that savings earn in a year in terms of hours of work?
A.)100 hrs
b.)20hrs
c.)40hrs
d.)400 hrs.

Answer 1

Answer:

The correct option is b.

Step-by-step explanation:

It is given that you earn $10.00 per hr.

Principal amount = $4,000.00

Rate of interest = 5%

Time = 1 year

Formula for simple interest:

$I=P\times r\times t$

where, P is Principal, r is rate of interest and t is time in years.

Substitute P=4000, r=0.05 and t=1 in the above formula.

$I=4000\times 0.05\times 1$

$I=200$

The interest earn in a year is $200.

1 hr = $10.00

$\frac{200}{10}=20$

The interest earn in a year in terms of hours of work is 20 hrs.

Therefore the correct option is b.

Answer 2

You are investing $2,000 fro 3 months and the APR is 4% so you will get one quarter of the APR for a year. For the year 4% interest is $2,00 x .04 or $80 for the year. # months is 1/4 of a year so divide $80 by 4 to get the interest fro 3 months which is 20 so the answer is B.