Question

Sally deposited money into a savings account paying 4% simple interest per year. The first year, she earned $75 in interest. How much interest will she earn during the following year?

Answer 1

75 dollars

Explanation:

Given that Sally deposited money into a savings account paying 4% simple interest per year.

So interest for I year would be calculated using the formula

Simple Interest = PTR/100

Here T=1 year, interest = 75 and r = rate of interest = 4%

Substitute to have

`75=(P(1)(4))/(100) \\P=(75(100))/(4) \\=1875`

The following year since simple interest only for principal interest would be calculated and hence simple interest for next year

= same 75 dollars

Answer 2

Amount of interest that she will earn during the following year = $75

Explanation:

Given that Sally deposited money into a savings account paying 4% simple interest per year. The first year, she earned $75 in interest. Now we need to find about how much interest will she earn during the following year.

We know that simple interest is calculated on the same amount each year.

So the interest amount will also be same every year.

Hence final answer is $75.