Question

Whitney has $50 in a savings account that earns 10% interest per year.The interest is not compounded. How much interest will she earn in 2 years? Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

Answer 1

$10

Explanation:

We solve the above question using Simple Interest formula

This is given as:

i = prt, where

i is the interest earned

p is the principal (starting amount) = $50

r is the interest rate expressed as a decimal = 10% = 0.1

t is the time in years = 2 years

Hence,

i = $50 × 0.1 × 2

i = $10

Therefore, the amount of interest she will earn in 2 years is $10