A high school student deposits their summer job earnings of $800 into a simple interest savings plan with a 15% rate. How much will the student have earned after 4 years?(1 point)

Question

Responses

$48,000.00
$48,000.00

$480
$480

$120.00
$120.00

$1399.21

Answer 1

To calculate the earning from a simple interest savings plan, you can use the formula for simple interest:

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

Where:

• \(I\) is the interest earned,
• \(P\) is the principal amount (initial deposit),
• \(r\) is the annual interest rate (in decimal),
• \(t\) is the time in years.

For this scenario:

• \(P = 800\) (the amount deposited),
• \(r = 0.15\) (15% as a decimal),
• \(t = 4\) (the number of years).

Now plug in the values:

\[ I = 800 \times 0.15 \times 4 \]

Calculating that gives:

\[ I = 800 \times 0.15 = 120 \] \[ I = 120 \times 4 = 480 \]

So, the total interest earned after 4 years is $480.

Therefore, the correct response is:

$480