Question

marc deposits $840 into a savings account.The account pays 2% simple interest on an annual basis.If he does not add or withdraw money from the account .How much interest will he earn after 6 months? Around to the nearest cent

Answer 1

Using the simple interest formula, Marc will earn $8.40 in interest after depositing $840 in a savings account at a 2% annual interest rate over a period of 6 months.

Step-by-step explanation:

To calculate how much simple interest Marc will earn on his $840 deposit after 6 months with an annual interest rate of 2%, we use the simple interest formula:

I = P × r × t

Where:

I is the interest earned

P is the principal amount (the initial amount of money)

r is the annual interest rate (in decimal form)

t is the time the money is invested for (in years)

First, we convert the annual interest rate to a decimal by dividing by 100:

2% = 2 ÷ 100 = 0.02

Next, since Marc is earning interest for 6 months, we need to express this time period in years. There are 12 months in a year, so 6 months is 6 ÷ 12 or 0.5 years.

Now we can plug the numbers into the simple interest formula:

I = $840 × 0.02 × 0.5

I = $8.40

So, Marc will earn $8.40 in simple interest after 6 months, rounding to the nearest cent.