Chris put $1,500 in a savings account at an annual interest rate of 5%. If Chris does not deposit or withdraw any money, what is the amount of interest Chris will earn the first year her money is in the savings account?
f $750 g $75 h $500 j $50
The amount of interest Chris will earn can be found by multiplying the principal (initial amount deposited) by the interest rate as a decimal:
$1,500 x 0.05 = $75
Therefore, the answer is g) $75.
To calculate the amount of interest Chris will earn the first year, we need to use the formula:
Interest = Principal * Rate
Principal → $1,500
Rate → 5% or 0.05
Using the formula, we can calculate the interest:
Interest = $1,500 * 0.05
Calculating:
Interest = $75
Therefore, the correct answer is (g) $75. Chris will earn $75 in interest the first year.