Question

Nathan opens a new savings account and makes an initial deposit of $400. If the account earns 2% annual interest, how much interest will he earn in 9 months?
Enter your answer as a number, like this: 42

Answer 1

To calculate the interest earned in 9 months on an initial deposit of $400 at an annual interest rate of 2%, we can use the formula for simple interest:

\[
\text{Interest} = P \times r \times t
\]

where:
- \( P \) = principal amount (initial deposit)
- \( r \) = annual interest rate (as a decimal)
- \( t \) = time in years

Given:
- \( P = 400 \)
- \( r = 0.02 \) (2% expressed as a decimal)
- \( t = \frac{9}{12} = 0.75 \) years

Now substituting the values into the formula:

\[
\text{Interest} = 400 \times 0.02 \times 0.75
\]

Calculating:

\[
\text{Interest} = 400 \times 0.02 = 8
\]
\[
\text{Interest} = 8 \times 0.75 = 6
\]

Thus, the interest earned in 9 months is **6**.