Alicia puts $400.00 in a bank account. Each year the account earns 5% simple interest. How much money will be in her bank account in six months?

Responses
$10.00

$410.00

$20.00

$420.00

1 answer

To calculate how much money will be in Alicia's bank account in six months with 5% simple interest on $400.00, we first need to determine the interest earned in that time frame.

The formula for simple interest is:

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

Where:

  • Principal = $400.00
  • Rate = 5% = 0.05
  • Time = 6 months = 0.5 years

Now, plugging in the values:

\[ \text{Interest} = 400 \times 0.05 \times 0.5 = 400 \times 0.025 = 10 \]

So, the interest earned in six months is $10.00.

Now, let's find out how much money will be in the account after six months:

\[ \text{Total Amount} = \text{Principal} + \text{Interest} = 400 + 10 = 410 \]

Therefore, the total amount in the account after six months will be $410.00.

The correct answer is $410.00.