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?

Question

$480
$120
$1399.21
$48000

Answer 1

To calculate the amount earned from a simple interest savings plan, you can use the formula:

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

where:

• \( P \) = principal amount (initial deposit)
• \( r \) = annual interest rate (in decimal)
• \( t \) = time (in years)

In this case:

• \( P = 800 \)
• \( r = 15% = 0.15 \)
• \( t = 4 \)

Now, plug in the values:

\[ \text{Interest} = 800 \times 0.15 \times 4 \]

Calculating:

\[ \text{Interest} = 800 \times 0.15 = 120 \] \[ \text{Interest} = 120 \times 4 = 480 \]

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

Therefore, the correct answer is:

$480