Jay opens a savings account with $100.00. His account earns 4% simple interest annually. How much money will be in his account 1 year later if he makes no deposits or withdrawals?
A. $96.00
B. $100.00
C. $104.00
D. $148.00
To find the amount of money in Jay's account after 1 year, we can use the simple interest formula:
Interest = Principal * Rate * Time
Where:
Principal = $100.00
Rate = 4% = 0.04
Time = 1 year
Using the formula, we can calculate the interest earned:
Interest = $100.00 * 0.04 * 1 = $4.00
To find the total amount in the account, we add the interest earned to the principal:
Total amount = Principal + Interest = $100.00 + $4.00 = $104.00
Therefore, the answer is C. $104.00.