Martina deposits $200 into an account that pays simple interest at a rate of 6% per year. How much interest will she be paid in the first 4 years?

Question

Martina deposits $200 into an account that pays simple interest at a rate of 6% per year. How much interest will she be paid in the first 4 years?

Answer 1

Andrea,

 

Use the formula for simple interest:

 

I = Prt.

 

Let P = 200, r = .06, and t = 4. Plug these into the formula and crank out the answer:

 

I = (200)(.06)(4) = $48.

 

Martina will earn $48 in interest over the four year period.