Question

Espen

Deandre deposits $500 into an account that pays simple interest at a rate of 4% per year. How much Interest will he be paid in the first 2 years?
sd
Х
5
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Answer 1

The Interest I paid on a deposited amount (principal) at a certain certain rate r over a period of time t is;

`I=(prt)/(100)`
`\begin{gathered} p=\text{ \$500} \\ r=4\text{ \%} \\ t=2\text{years} \end{gathered}`
`\begin{gathered} I=(500*4*2)/(100) \\ I=40 \end{gathered}`

Hence, the interest paid after the first two years is $40