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?

Question

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.