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16 votes
Mary deposits $400 into an account that pays simple interest at a rate of 2% per year. How much interest will she be paid in the first 2 years?

2 Answers

3 votes

Answer:

Mary paid interest $16 in the first 2 years.

Step-by-step explanation:

As per given question we have provided that :

  • ➠ Principal = $400
  • ➠ Time = 2 years
  • ➠ Rate = 2% per annum

Here's the required formula to find the Principal :


{\longrightarrow{\pmb{\tt{I= (PRT)/(100)}}}}

  • ↝ I = Interest
  • ↝ P = Principal
  • ↝ R = Rate
  • ↝ T = Time

Substituting all the given values in the formula to find the Principal :


{\longmapsto{\sf{Interest= (PRT)/(100)}}}


{\longmapsto{\sf{Interest= (P * R * T)/(100)}}}


{\longmapsto{\sf{Interest= (400 * 2 * 2)/(100)}}}


{\longmapsto{\sf{Interest= \frac{4 \cancel{00} * 2 * 2}{1 \cancel{00}}}}}


{\longmapsto{\sf{Interest= 4 * 2 * 2}}}


{\longmapsto{\sf{Interest= 8 * 2}}}


{\longmapsto{\sf{Interest = \$16}}}


\star{\underline{\boxed{\sf{\purple{Interest = \$16}}}}}

Hence, the interest is $16.


\rule{300}{2.5}

User Jeroen Vermeulen
by
8.1k points
11 votes

Answer:

$16

Explanation:

Simple interest is based on the principal amount of a loan or deposit, whereas compound interest is based on the principal amount and the interest that accumulates on it in every period.

Simple Interest = P x r x n

where P = Principal amount, r = Annual interest rate, n = Term of loan, in years​

2% = 2 ÷ 100 = 0.02 so r = 0.02

Therefore,

Simple Interest = 400 x 0.02 x 2 = 16

So she will be paid $16 in the first two years.

User Eli Iser
by
8.7k points

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