Question

Questions 1-12 of 12 Page 1 of 1Question 1 (1 point)Ginny said that she earns money by helping her dad paint. She has saved $10,000 and is going to put it in a savings accountthat earns 8.75% simple interest annually. How much interest will Ginny earn in 1 year?

Answer 1

The interest generated from a simple interest account is given by the following expression:

$I\text{ = M}\cdot r\cdot t$

Where I is the value of the interested after "t" years, M is the value applied to the account, r is the interest rate divided by 100 and t is the elapsed time in years.

With this in mind let's apply the data from the problem into the expression.

$\begin{gathered} I\text{ = 10000}\cdot\frac{8.75}{100}\cdot1 \\ I\text{ = 10000}\cdot0.0875\text{ = }875 \end{gathered}$

After a year Ginny will earn $ 875 in interest from that account.