Nathan has $40 in a savings account. The interest rate is 5% per year and is not compounded. How much interest will he earn in 1 year?
Use the formulai = prt, where / is the interest earned, p is the principal (starting amount),
is the interest rate expressed as a decimal, and is the time in years.
Submit

Money with Nathan in his savings account = $40

Rate of interest per annum = 5%

We know that :

In this case :

Principal = $40

Rate = 5%

Time = 1 year

Simple interest he will earn in 1 year :

Amount = Principal + Interest

Amount Nathan has to pay at the end of one year :

Thus, at the end of 1 year Nathan has to pay $42.

Therefore, simple interest Nathan will earn in 1 year = $2

step-by-step explanation:

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