Answer
The person's $\$500$ will earn an interest of $\$40$ at the end of four years.
Work Step by Step
The formula for simple interest $I$ is:
$I=Prt$
where
$P$ = principal amount invested
$r$ = interest rate per year
$t$ = time in years
The given situation has:
$P$=$\$500$
$r=2\%=0.02$
$t=4$ years
Use the formula above to obtain:
$I=Prt
\\I=\$500(0.02)(4)
\\I=\$40$
