Question

Justine has $40 in a savings account that

earns 5% annually. The interest is not compounded. How much interest will she earn in 1 year?

Answer 1

S.I = $2

Explanation:

Given the following data;

Principal = $40

Interest rate = 5%

Time, t = 1

To find the simple interest;

Mathematically, simple interest is calculated using this formula;

`S.I = \frac {PRT}{100}`

Where;

S.I is simple interest.

P is the principal.

R is the interest rate.

T is the time.

Substituting into the equation, we have;

`S.I = \frac {40*5*1}{100}`

`S.I = \frac {200}{100}`

S.I = $2