Question

When Sarah invests $4,000 in a money market account she receives 1.4% simple interest annually. If she doesn't add or subtract any money how much interest will she earn after 4 years?

Answer 1

Let's use the formula for simple interest: i = p*r*t, where p is the principal amount, r is the interest rate as a decimal fraction, and t is the number of years.

Filling in the given info: i = $4000*0.014*4 = $224.

She will have accumulated $224 in interest over those 4 years.

Answer 2

$224

Explanation:

We have been Sarah invests $4,000 in a money market account she receives 1.4% simple interest annually. We are asked to find the amount of interest Sarah will get after 4 years.

We will use simple interest formula to solve our given problem.

`I=Prt`, where,

I = Amount of interest after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

t = Time in years.

First of all, we will convert our given interest rate in decimal form:

`1.4\%=(1.4)/(100)=0.014`

Upon substituting our given values in simple interest formula, we will get:

`I=\$4,000\cdot 0.014\cdot 4`

`I=\$224`

Therefore, Sarah will get an amount of $224 in interest after 4 years.