College Algebra (11th Edition)

Published by Pearson
ISBN 10: 0321671791
ISBN 13: 978-0-32167-179-0

Chapter 1 - Section 1.2 - Applications and Modeling with Linear Equations - 1.2 Exercises - Page 92: 3

Answer

$\$40$

Work Step by Step

Use the simple interst formula $I=Prt$ where $I$=interest earned, $P$=principal amount invested, $i$ = annual interest rate, ad $t$=time in years. Here we have $P=\$500$, $i=2\%=0.02$, and $t=4$. Substitute these values into the formula above to obtain: $I=500\cdot 0.02 \cdot 4 $I=40 Thus, interest earned is $\$40$.
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