Question

Ivanna deposits 300 into an account that pays simple interest at a rate of 5% per year. How much interest will she be paid in the first four years?

Answer 1

To calculate the simple interest Ivanna will earn over four years, multiply her principal deposit of $300 by the annual interest rate of 5% (converted to decimal as 0.05) and the number of years (4). The simple interest she will be paid is $60.

Step-by-step explanation:

The subject of this question is Mathematics, specifically focusing on the concept of simple interest. Ivanna makes a deposit of $300 into an account with a simple interest rate of 5% per year. To calculate the simple interest for the first four years, we use the formula:

Simple Interest = Principal × Interest Rate × Time

The Principal (P) here is $300, the Interest Rate (r) is 5% or 0.05 when converted to a decimal, and the Time (t) is 4 years. Plugging these values into the formula, we get:

Simple Interest = $300 × 0.05 × 4

Calculating this, we get:

Simple Interest = $60

Therefore, Ivanna will be paid $60 in interest over the first four years.