Question

Nathan has $40 in a savings account. The interest rate is 5% per year and is not

Answer 1

Money with Nathan in his savings account = $40

Rate of interest per annum = 5%

We know that :

$\color{hotpink}\tt \: simple \: interest \color{plum}= \frac{principal \times rate \times time}{100}$

In this case :

Principal = $40

Rate = 5%

Time = 1 year

Simple interest he will earn in 1 year :

$=\tt \frac{40 \times 5 \times 1}{100}$

$= \tt \frac{200}{100}$

$\color{plum} =\tt\ \: 2$

Amount = Principal + Interest

Amount Nathan has to pay at the end of one year :

$= \tt40 + 2$

$\color{plum} =\tt \ 42$

Thus, at the end of 1 year Nathan has to pay $42.

Therefore, simple interest Nathan will earn in 1 year = $2