14.6k views
19 votes
Calculate the amount of interest earned on a $2500 deposit into an account for 5 years with a 2% interest rate

User Holdenlee
by
8.6k points

1 Answer

6 votes

Final answer:

To calculate the interest earned on a $2500 deposit at a 2% rate for 5 years, use the simple interest formula. Multiply the principal ($2500) by the rate (0.02) and the time (5 years) to get $250 in interest.

Step-by-step explanation:

To calculate the amount of interest earned on a $2500 deposit in an account for 5 years with a 2% interest rate, you can use the simple interest formula, which is Interest = Principal × Rate × Time.

For this example:

Principal (the initial amount deposited): $2500

Rate (interest rate per period): 2% or 0.02 as a decimal

Time (number of periods the money is invested): 5 years

Using the formula, we get:

Interest = $2500 × 0.02 × 5

Interest = $50 × 5

Interest = $250

The simple interest earned over 5 years is $250.

User Blackd
by
7.6k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories