Question

Kiera has $20 in a savings account. The interest rate is 5%

per year and is not compounded. How much interest will
she earn in 2 years?

Answer 1

Calculation:

First, converting R percent to r a decimal

r = R/100 = 5%/100 = 0.05 per year,

then, solving our equation

I = 20 × 0.05 × 2 = 2

I = $ 2.00

The simple interest accumulated

on a principal of $ 20.00

at a rate of 5% per year

for 2 years is $ 2.00.