Question

You deposit $750 in a savings account that earns simple interest at a rate of 2.5% per year. how much interest will you have earned after 5 years?

Answer 1

To calculate the simple interest on the deposit, multiply the principal amount of $750 by the interest rate of 2.5% and then by the time period of 5 years, resulting in $93.75.

Step-by-step explanation:

To calculate the simple interest earned on a $750 deposit at a 2.5% annual interest rate over 5 years, you can use the simple interest formula: Interest = Principal × Rate × Time. In this case, the principal (P) is $750, the rate (r) is 2.5%, or 0.025 when converted to decimal form, and the time (t) is 5 years.

So, the calculation would look like this:

• Interest = $750 × 0.025 × 5

Interest = $93.75

Thus, after 5 years, $93.75 in simple interest will have been earned.