Question

Diane has $20 in a savings account that earns 5 % annually. How much will she earn in interest in 1 year?

Answer 1

$21

Explanation:

Given data

Principal= $20

Rate = 5%

time= 1 year

Required

The final amount A

Applying the simple interest formula

A= P(1+rt)

substitute

A=20(1+0.05*1)

A=20(1.05)

A=20*1.05

A=$21

Hence she will earn $21