Donna deposits into an account that pays simple interest at a rate of 5% per year. How much interest will she be paid in the first 6 years?
How much did she deposit?
To determine how much interest Donna will be paid in the first 6 years, we first need to calculate the amount of interest earned each year and then sum it up.
The formula for calculating simple interest is:
Interest = Principal × Rate × Time
Given that the principal (amount deposited) is not mentioned in the question, we'll assume it to be $1.
So, for the first year, the interest Donna will earn is:
Interest1 = Principal × Rate × Time = $1 × 5% × 1 year = $0.05
For the second year:
Interest2 = Principal × Rate × Time = $1 × 5% × 1 year = $0.05
And so on, for the third, fourth, fifth, and sixth years:
Interest3 = Principal × Rate × Time = $1 × 5% × 1 year = $0.05
Interest4 = Principal × Rate × Time = $1 × 5% × 1 year = $0.05
Interest5 = Principal × Rate × Time = $1 × 5% × 1 year = $0.05
Interest6 = Principal × Rate × Time = $1 × 5% × 1 year = $0.05
Now, to find the total interest earned in the first 6 years, we add up the individual interest amounts:
Total Interest = Interest1 + Interest2 + Interest3 + Interest4 + Interest5 + Interest6
= $0.05 + $0.05 + $0.05 + $0.05 + $0.05 + $0.05
= $0.30
Therefore, Donna will be paid $0.30 in interest in the first 6 years.