Question

Carmen has 100$ in a savings account that earns 5% annually. The interest is not compounded. How much interest will she earn in 1 year?

Answer 1

$5

Explanation:

Use the formula for simple interest:

i = p*r*t, where r is the annual interest rate, expressed as a decimal fraction, p is the initial amount (principal), and t is the number of years.

Here, i = $100*0.05*1 = $5

Answer 2

Answer: 5$

$100 x 0.05 = 5$