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Lexi has $20 in a savings account that earns 10% interest per year. The interest is not
compounded. How much interest will she earn in 1 year?
Use the formula 1 = prt, where I is the interest earned, p is the principal (starting amount), r
is the interest rate expressed as a decimal, and t is the time in years.

Sagot :

Answer:

She earns $2 in interest in 1 year.

Step-by-step explanation:

Simple Interest

This is a simple interest problem.

The simple interest formula is given by:

[tex]E = P*I*t[/tex]

In which E is the amount of interest earned, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

After t years, the total amount of money is:

[tex]T = E + P[/tex]

Lexi has $20 in a savings account that earns 10% interest per year. The interest is not compounded.

This means that [tex]P = 20, I = 0.1[/tex]

How much interest will she earn in 1 year?

This is E when [tex]t = 1[/tex]. So

[tex]E = P*I*t = 20*0.1*1 = 2[/tex]

She earns $2 in interest in 1 year.

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