Final answer:
Ned will have $510 in his savings account after one year with a 2% annual interest rate on his initial deposit of $500. We use the simple interest formula to calculate the total amount as $500 × (1 + 0.02).
Step-by-step explanation:
The question is asking how much money Ned will have in his savings account after one year with an initial deposit of $500 and an interest rate of 2% per year. To calculate the total amount after one year, we use the formula for simple interest: principal amount (initial deposit) × (1 + (interest rate per period)).
In Ned's case, the initial deposit is $500 and the interest rate is 2% or 0.02 when expressed as a decimal. Thus, after one year, the amount in the savings account will be:
$500 × (1 + 0.02) = $500 × 1.02 = $510
Therefore, the correct answer to the question is option A, which is $510 after 1 year.