Question

Marco deposited $500 in a savings account earning 4% interest over 5 years.

What was the total amount of interest earned at the end of 5 years?

A.$40

B.$50

C.$100

D.$200

Answer 1

The total amount of interest earned by Marco at the end of 5 years is $100 which is letter C. Below is the solution:

Given: p = $500 deposit
r = 4% interest
t = 5 years term

Formula:
i = prt (principal x rate x term)
i = $500 x .04 x 5
i = $100