Final answer:
The interest earned in 2 years on a savings account with $40.00 at a 5% annual interest rate is $4.00.
Step-by-step explanation:
To calculate the interest earned in 2 years on a savings account, we can use the formula: Interest = Principal x Rate x Time. The principal is $40.00 and the rate is 5% per year. The time is 2 years. Plugging in the values, we get: Interest = $40.00 x 0.05 x 2 = $4.00. Therefore, Hank will earn $4.00 in interest over 2 years in his savings account.The formula used, Interest = Principal x Rate x Time, is a fundamental formula in calculating simple interest. In this context, it shows that with a principal amount of $40.00, an annual interest rate of 5%, and a time period of 2 years, the interest earned accumulates to $4.00. This straightforward calculation provides a clear understanding of how interest accrues over time in a savings account with a fixed interest rate.