Question

Sue had $400 in her savings account . If the bank pays her 6 1/2% interest, how much interest will she earn?

Answer 1

To calculate the interest Sue will earn on her savings account, we can use the formula for simple interest:

\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]

In this case:
- Principal = $400
- Rate = 6.5% = 0.065 (as a decimal)
- Time = 1 year (assuming the interest is calculated annually)

Now, substituting the values into the formula:

\[
\text{Interest} = 400 \times 0.065 \times 1
\]
\[
\text{Interest} = 400 \times 0.065
\]
\[
\text{Interest} = 26
\]

So, Sue will earn **$26** in interest after one year.