Question

Anne opens a savings account with a deposit of $670. She will earn 1.5% interest each year on her money. How much interest will she earn over a period of 10 years?

Answer 1

Anne will earn $100.50 in simple interest over 10 years with an initial deposit of $670 and an annual interest rate of 1.5%, calculated using the simple interest formula I = PRT.

Step-by-step explanation:

To calculate the total interest Anne will earn over a period of 10 years on her initial deposit of $670 with a 1.5% annual interest rate, we will use the formula for simple interest, since the problem does not specify compound interest. The formula for simple interest is I = PRT, where I is the interest earned, P is the principal amount ($670), R is the annual interest rate (1.5% or 0.015), and T is the time in years (10).

So the calculation is as follows:
I = $670 × 0.015 × 10 = $100.50

Therefore, Anne will earn $100.50 in interest over 10 years. This is straightforward simple interest which does not take into account any compounding that might occur with a different type of savings account or if the interest was to be compounded annually.