Question

Hannah has $1,200 in her savings account. If the bank pays 3% interest per year on savings, how much Iinterest does she earn in one year?

Answer 1

Basically, we need to use the formula provided:

$I=PRT$

Where:

P = Principal (starting) = $1200

Rate = 3% = 0.03

Time = 1

$\begin{gathered} I=1200\times0.03\times1 \\ I=36 \end{gathered}$

Hannah earns $36 in interest after 1 year