Question

Maria put $500 into a savings account. She made no more deposits or withdrawals. The account earns 2% simple interest per year. How much money will be in the account after 5 years?5,000,50,550,1000

Answer 1

Hello! The formula for simple interest is prt. That means multiply the principal (initial amount) by the rate (simple interest rate) by time (usually in months or years). $500 is the principal and 2% is the interest rate. Multiply both numbers. 500 * 2% (0.02) is 10. $10 is the simple interest given out per year. We're looking for the total for 5 years. 10 * 5 is 50. Add the amount of interest to the principal. 500 + 50 is 550. There. Maria will have $550 in her savings account after 5 years. The answer is C: 550.