Rachel deposit $2000 in the money market account. The bank offers a simple interest rate of 1.2%. How much interest will she earn in 10 years

Answer 1

To calculate the simple interest earned over a period of time, you can use the formula:

\[ I = P \times r \times t \]

where:

• \(I\) = interest earned
• \(P\) = principal amount (initial deposit)
• \(r\) = interest rate (as a decimal)
• \(t\) = time in years

In this case:

• \(P = 2000\)
• \(r = 1.2% = 0.012\)
• \(t = 10\)

Now, plug the values into the formula:

\[ I = 2000 \times 0.012 \times 10 \]

\[ I = 2000 \times 0.12 \]

\[ I = 240 \]

So, Rachel will earn $240 in interest over 10 years.