John deposited $500 in a savings account at an annual interest rate of 5%. If John
does not deposit or withdraw any money, what is the amount of interest John will
earn in 10 years?
John deposited $500 in a savings account at an annual interest rate of 5%. If John
does not deposit or withdraw any money, what is the amount of interest John will
earn in 10 years?
$250
$750
$505
$515
The interest earned on a savings account can be calculated using the formula:
Interest = Principal x Rate x Time
Where, Principal is the amount deposited, Rate is the annual interest rate, and Time is the duration for which the interest is calculated.
In this case, John deposited $500 in the savings account at an annual interest rate of 5%. Therefore, the Principal is $500 and the Rate is 5%.
The duration for which the interest is calculated is 10 years. So, Time is 10.
Using the formula, we get:
Interest = Principal x Rate x Time
Interest = $500 x 5% x 10
Interest = $250
Therefore, John will earn $250 as interest in 10 years. The answer is option A.