puts $400 in a bank account. Each year the account earns 6% simple interest. How much interest will be earned in 5 years?
Responses
A $1,200$1,200
B $12$12
C $12,000$12,000
D $120
To calculate the amount of interest earned, we can use the formula for simple interest:
Interest = Principal (initial amount) * Rate * Time
In this case, the principal is $400, the rate is 6%, and the time is 5 years.
Interest = $400 * 0.06 * 5 = $120
Therefore, the interest earned in 5 years is $120.
The correct answer is D) $120.