Question

How much interest did you get if you put $700 in an account and earned 5% interest from that?

a) $30
b) $35
c) $40
d) $45

Answer 1

To find the interest from a $700 deposit at a 5% interest rate, the formula I = PRT is used, with P being $700, R being 5%, and T being 1 year. The calculation would be 700 x 0.05 x 1, resulting in an interest of $35.

Step-by-step explanation:

To calculate the interest earned from an account with a $700 deposit and a 5% interest rate, you can use the formula for simple interest:

I = PRT

where:

• I is the interest
• P is the principal amount ($700)
• R is the interest rate (5% or 0.05)
• T is the time in years (assuming it is 1 year in this case)

Using the formula for one year:

I = 700 × 0.05 × 1

I = $35

So, the interest earned is $35, which corresponds to option b).