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5 votes
Nancy deposits $6,000 into a savings account which pays 2.8% *

interest per year. She doesn't take money out or put money in. How
much interest did she make after 5 years?

User Grishma
by
8.3k points

1 Answer

3 votes

Explanation:

To calculate the interest earned, you can use the formula for simple interest:

\[ \text{Simple Interest} = P \times r \times t \]

Where:

- \( P \) is the principal amount (initial deposit),

- \( r \) is the annual interest rate (as a decimal),

- \( t \) is the time the money is invested or borrowed for (in years).

In this case:

- \( P = $6,000 \),

- \( r = 2.8\% \) or \( 0.028 \) (converted to a decimal),

- \( t = 5 \) years.

Substitute these values into the formula:

\[ \text{Simple Interest} = 6000 \times 0.028 \times 5 \]

Calculate the result to find the total interest earned.

User Vlo
by
8.4k points