To determine how much interest Shiva's account will earn by the end of one year, we need to use the formula for simple interest. The simple interest formula is:
[tex]\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \][/tex]
In this formula:
- The principal is the initial amount of money deposited.
- The rate is the annual interest rate (expressed as a decimal).
- The time is the amount of time the money is invested or borrowed for, in years.
Let's plug in the values provided:
- Principal (P): [tex]$1,500
- Rate (R): 2.76% (which is 0.0276 as a decimal)
- Time (T): 1 year
First, convert the interest rate from a percentage to a decimal by dividing by 100:
\[ \text{Rate} = \frac{2.76}{100} = 0.0276 \]
Next, substitute these values into the simple interest formula:
\[ \text{Interest} = 1500 \times 0.0276 \times 1 \]
Now, perform the multiplication:
\[ \text{Interest} = 1500 \times 0.0276 \]
\[ \text{Interest} = 41.40 \]
Therefore, by the end of one year, Shiva's account will earn \( \$[/tex]41.40 \) in interest.
