If a bank offers a savings account that pays simple interest rate of 4% and you deposit $475.00 into this account, how much interest will you have earned after 3 years?
Interest = Principal * Rate * Time
I = 475 * 0.04 * 3
I = ?
what is it??
To calculate the interest earned on a savings account, you can use the formula:
Interest = Principal * Interest Rate * Time
Where:
- Principal is the initial amount deposited
- Interest Rate is the annual interest rate
- Time is the number of years
In this case, the principal amount is $475.00, the interest rate is 4% (or 0.04 as a decimal), and the time is 3 years.
Substituting these values into the formula, we get:
Interest = $475.00 * 0.04 * 3
Calculating this expression:
Interest = $57.00
So, you will have earned $57.00 in interest after 3 years.