Question

Mr. pharm put $1,000 into a savings account. The account pays 5% simple interest on an annual basis. If he does not add or withdraw money from the account, how much interest will he earn after 2 years?

Answer 1

Mr. Pharm will earn $100 in simple interest after 2 years on his $1,000 deposit in a savings account paying an annual rate of 5% simple interest.

Step-by-step explanation:

To calculate the simple interest Mr. Pharm will earn after 2 years on a $1,000 deposit in an account paying 5% simple interest annually, we use the simple interest formula:

Simple Interest = Principal × Rate × Time

In this case, Principal (P) is $1,000, Rate (R) is 5% or 0.05 as a decimal, and Time (T) is 2 years. So, the calculation is:

$1,000 × 0.05 × 2 = $100

Therefore, Mr. Pharm will earn $100 in interest after 2 years if he does not add or withdraw money from the account.