Computation - Find your level!

Question

Rishi gets a savings account that earns an interest rate of 0.8%. Rishi starts with a principle balance of $200. Use the equation
where
= interest earning,
= principle balance,
= interest rate, and
= time in years. How much interest is earned, in dollars, when
?

Answer 1

To find the interest earned by Rishi on his savings account, we will use the formula for simple interest, which is given by:

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

Where:

• \( I \) = interest earned
• \( P \) = principal balance (initial amount)
• \( r \) = interest rate (as a decimal)
• \( t \) = time in years

Given the following information:

• Principal balance \( P = 200 \) dollars
• Interest rate \( r = 0.8% = 0.008 \) (converting percentage to decimal)
• Time \( t \) (not specified in the question, assuming it is 1 year for this calculation)

Substituting the values into the formula:

\[ I = 200 \times 0.008 \times 1 \]

Calculating:

\[ I = 200 \times 0.008 = 1.6 \]

Thus, the interest earned when \( t = 1 \) year is $1.60. If you provide a specific time \( t \) in years, I can calculate the interest for that duration as well.