Question

Diane deposits $400 into an account that pays simple interest at a rate of 5% per year. How much interest will she be paid in the first 2 years

(7th grade math)

Answer 1

in total, Diane will be paid $20 + $40 = $60 in interest over the first 2 years.

Explanation:

Simple interest is calculated as:

I = Prt

where:

I = Interest

P = Principal (initial amount deposited)

r = Interest rate (expressed as a decimal)

t = Time (in years)

So in this case, with a principal of $400 and an interest rate of 5% (or 0.05 as a decimal), the interest paid in the first year would be:

I = $400 * 0.05 * 1 = $20

And in the second year, it would be:

I = $400 * 0.05 * 2 = $40

So in total, Diane will be paid $20 + $40 = $60 in interest over the first 2 years.

Answer 2

Simple interest is calculated by multiplying the principal (the initial amount of money deposited), the interest rate, and the number of years the money is on deposit.

To find out how much interest Diane will be paid in the first 2 years, we need to calculate the total interest earned over that time period.

First, we find the interest rate by multiplying the annual interest rate of 5% by .01 (to convert the percentage to decimal form)

0.05 * .01 = 0.05

Next, we find the total interest earned by multiplying the principal (400), the interest rate (0.05), and the number of years (2)

400 x 0.05 x 2 = 40

So, in the first 2 years, Diane will be paid $40 in interest on her deposit of $400.