Question

Keisha deposits $500 into an account that pays simple interest at a rate of 2% per year. How much interest will she be paid in the first 4 years?

Answer 1

Answer:

$40

Step-by-step explanation:

You are going to want to use the simple interest formula for this.

$I=Prt$

I = interest amount

P = principal amount

r = interest rate (decimal form)

t = time

First, change 2% into its decimal form:

2% -> $\frac{2}{100}$ -> 0.02

Next, plug in the values into the equation as shown below:

$I=500(0.02)(4)$

$I=40$

Keisha earned $40 worth of interest after the first 4 years.