Question

A bank is offering 4.5% simple interest on a saving account. If you deposit $8,000 how much interest will you earn in five years?

A. $360
B. $720
C. $1, 800
D. $3, 600
E. $4, 800

Answer 1

The interest earned on a $8,000 deposit in a savings account with a 4.5% interest rate over five years is $1,800.

Step-by-step explanation:

To calculate the interest earned on a savings account, we can use the formula:

Interest = Principal × Rate × Time.

In this case, the principal is $8,000, the rate is 4.5%, and the time is 5 years.

Substituting these values into the formula, we get: Interest = $8,000 × 0.045 × 5 = $1,800. Therefore, the correct answer is C. $1,800.