Question

Joe deposited $2,000 into his savings account. The bank has a rate of 7% interest per year. How much interest did he earn in 5 years?

Answer 1

Joe earned $700 in interest in 5 years

Explanation:

To calculate the interest earned by Joe in 5 years at a rate of 7% per year, we can use the simple interest formula:

Interest = Principal x Rate x Time

Where:

Principal is the initial amount deposited, which is $2,000 in this case

Rate is the interest rate per year, which is 7%

Time is the number of years, which is 5 years in this case

Plugging in the values, we get:

Interest = $2,000 x 0.07 x 5

Interest = $700

Therefore, Joe earned $700 in interest in 5 years.