Question

Pennywise put $300 in a bank account earning 4%. How much will he earn in interest?

A) $12
B) $30
C) $120
D) $300

Answer 1

To calculate the interest earned on a $300 deposit at a 4% interest rate for one year, you use the formula Interest = Principal × Rate × Time, which results in an interest of $12.

Step-by-step explanation:

The question is asking to calculate the interest earned on a bank account with a principal amount of $300 at an interest rate of 4%. To calculate the interest earned for one year, you can use the simple interest formula, which is Interest = Principal × Rate × Time. Since the time is not specified, it's conventional to assume it is for one year.

In this instance, the calculation would be Interest = $300 × 0.04 × 1. When we calculate this, we get Interest = $12. Therefore, the interest earned on a $300 deposit at 4% for one year is $12.