Question

Susan has $800 in a savings account that earns 6% annually. If the interest is not compounded, how much interest will she earn in 5 years?

A) $30.00
B) $48.00
C) $240.00
Eliminate
D) $480.00

Answer 1

C) 240

Explanation:

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Answer 2

The correct option is C.

Explanation:

It is given that Susan has $800 in a savings account that earns 6% annually and the interest is not compounded.

It means Susan received simple interest.

Formula of simple interest:

`I=(P* r* t)/(100)`

Where P is principal amount, r is rate of interest in percentage and t is time in years.

`I=(800* 6* 5)/(100)`

`I=240`

The amount of interest is $240.00. Therefore option C is correct.