$700 is invested for a year. If the yearly interest rate 4.5% how much interest is earned in one year?
A. $3.15
B. $31.50
C $731.50
D. $315
To find the amount of interest earned in one year, we can use the formula:
interest = principal * rate
Given that the principal (initial investment) is $700 and the yearly interest rate is 4.5% (which can also be written as 0.045), we can substitute these values into the formula:
interest = $700 * 0.045 = $31.50
Therefore, the amount of interest earned in one year is $31.50.
The correct answer is B. $31.50.