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