Question

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Mrs. Rush puts in $300 in a bank account that earns 5%. How much interest will it have earned after 10 years?

Answer 1

Answer:

$150

Step-by-step explanation:

Let the account earns 5% APR as simple interest for the invested principal.

Now, the formula of simple interest gives that,

$A = P(1 + \frac{rt}{100})$, where A is the final amount, P is the principal amount invested, r is the % of interest and t is the number of years for which the principal is invested.

So, the interest earned will be given by, $I = P \times \frac{rt}{100}$

Hence, in our case, $300 is invested for 10 years at a simple interest of 5%. So,  $I = 300\times \frac{5 \times 10}{100} = 150$ dollars.

Therefore, the amount of interest earned will be $150. (Answer)