Question

"Sonya put $400 in a savings account for 3 years which pays 5% annual simple interest. The formula to determine the amount of interest earned is given by i = prt.

i represents the interest earned
p represents the principal invested
r represents the rate
t represents the time in years.
Using the formula above, how much interest will Sonya earn?"

A) $5
B) $15
C) $60
D) $300

Answer 1

Sonya will earn $60 in simple interest over a 3 year period from a $400 deposit in a savings account with a 5% annual interest rate, calculated using the simple interest formula i = prt.

Step-by-step explanation:

To calculate the simple interest that Sonya will earn on her $400 savings account, we use the formula i = prt, where:

• i represents the interest earned
• p represents the principal invested ($400)
• r represents the rate of interest (0.05)
• t represents the time in years (3)

Plugging Sonya's values into the formula:

i = $400 × 0.05 × 3

Calculating the above:

i = $20 × 3

i = $60

Therefore, Sonya will earn $60 in simple interest over the 3 year period.