Question

Chester has $450 in a savings account. The bank pays him 8% interest per year on the account. How much interest will Chester earn on his money in a year?

A) $36
B) $48
C) $60
D) $72

Answer 1

Chester will earn $36 in interest from his $450 savings account after one year at an interest rate of 8% per annum. We find this by multiplying the principal amount by the interest rate and the time period.

Step-by-step explanation:

The student's question is asking us to calculate the amount of interest Chester will earn from his savings account in a year. Chester has $450 in his savings account, and the bank pays him an 8% interest per year. To calculate the interest earned in one year, we use the formula:

Interest = Principal × Rate × Time

Where the principal is the initial amount in the account ($450), the rate is the annual interest rate (8%), and the time is the period the money is invested for (1 year).

Converting 8% into decimal form, we have 0.08. Now, we calculate the interest:

Interest = $450 × 0.08 × 1 = $36

Therefore, option A) $36 is the correct answer.