Question

Susan deposits $100 into a savings account that earns simple interest at a rate of 5%. If she makes no withdrawals, how much total interest has Susan's savings account earned after 5 years?

Answer 1

Interest is $25

Explanation:

Formula to find interest:

I = Prt

Given:

P = 100

r = 5% or 0.05

t = 5

Work:

I = Prt

I = 100(0.05)(5)

I = 5(5)

I = 25