Final answer:
The interest Fred earns at the end of the year on his $100 deposit with a simple interest rate of 4% is $4. Simple interest is calculated only on the principal amount and does not compound.
Step-by-step explanation:
Fred's simple interest earned at the end of the year can be calculated using the formula for simple interest: I = P × r × t, where I is the interest earned, P is the principal amount deposited, r is the annual interest rate, and t is the time in years the money is deposited.
In this scenario, Fred deposits $100 at the beginning of each year at a simple interest rate of 4%. Therefore, after one year, the interest Fred would earn is calculated as $100 × 0.04 × 1, which is $4.
It's important to note that simple interest is calculated only on the principal amount, so no matter how many years Fred keeps the money in his account, the interest earned each year will be the same as long as he does not make additional deposits and the interest rate stays at 4%.