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Terrence deposited $5,720 in a bank account with an annual interest rate of 6%. How much interest was earned in 4 years?

a. $1,372.80

b. $1,448.00

c. $1,492.80

d. $1,520.80

1 Answer

1 vote

Final answer:

Terrence will earn a total interest of $1,372.80 on his deposit of $5,720 at a 6% annual interest rate over 4 years using the simple interest formula. This is option (a) among the choices provided.

Step-by-step explanation:

Terrence deposited $5,720 in a bank account with an annual interest rate of 6%. To find out how much interest will be earned in 4 years with simple interest calculation, you can use the formula: Interest (I) = Principal (P) × Interest Rate (r) × Time (t).

In this case, the principal (P) is $5,720, the rate (r) is 6% or 0.06 as a decimal, and the time (t) is 4 years.

I = P × r × t
I = $5,720 × 0.06 × 4
I = $1,372.80

Therefore, the total interest earned after 4 years is $1,372.80, which corresponds to option (a).

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