Question

Paula has $50 in a savings account that earns 5% interest per year. The interest is not compounded .How much will she have in 1 year?

Answer 1

Answer: $52.50

Explanation:

There is $50 in the account and it earns interest at a rate of 5% a year.

This interest is not compounded therefore it is simple interest.

To calculate amount earned with simple interest is:

= Deposit * ( 1 + rate * time)

= 50 * ( 1 + 5% * 1 year)

= $52.50