Question

Claire deposited $500 into a savingsaccount that earns 2.5% annual simpleinterest. If she keeps this amount inthe account for 2 years, how muchinterest will she earn?

Answer 1

Step-by-step explanation

The interest that would be earned annually is given by the formula

`\begin{gathered} I=(PRT)/(100) \\ where\text{ p=deposit=\$500} \\ r=rate=2.5\text{\%} \\ t=time=2years \end{gathered}`

Therefore;

`I=(500*2.5*2)/(100)=5*2.5*2=25\text{ dollars}`

Answer: 25 dollars