Question

deon deposits $400 into an account that pays simple interest at a rate of 2% per year how much interest will be paid in the first five years

Answer 1

Simple interest on a $400 deposit at a 2% annual rate over five years is calculated using the formula Interest = Principal × Rate × Time, which equals $40.

Step-by-step explanation:

To calculate how much simple interest will be paid on a $400 deposit at a rate of 2% per year over the first five years, we use the simple interest formula: Interest = Principal × Rate × Time. Given that the principal (P) is $400, the annual interest rate (r) is 2% or 0.02 when expressed as a decimal, and the time (t) is 5 years, the calculation would be as follows:

Interest = $400 × 0.02 × 5 = $40

The interest paid over the 5 years would be $40.