To determine the amount of interest earned on an account over a specified period of time using simple interest, we will use the simple interest formula:
[tex]\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \][/tex]
Here's the step-by-step procedure:
1. Identify the principal amount (P):
The principal amount is the initial amount of money that was deposited or invested. In this case, the principal is [tex]\(\$650\)[/tex].
2. Identify the rate of interest (R):
The rate of interest is the percentage of the principal that is paid as interest each year. Here, the yearly rate of interest is [tex]\(4\%\)[/tex]. To use this in the formula, we need to convert the percentage into a decimal. So, [tex]\(4\%\)[/tex] becomes [tex]\(0.04\)[/tex].
3. Identify the time period (T):
The time period is the duration for which the money is invested or deposited, measured in years. For this question, the time period is [tex]\(2\)[/tex] years.
4. Substitute these values into the simple interest formula:
[tex]\[
\text{Interest} = 650 \times 0.04 \times 2
\][/tex]
5. Calculate the interest:
[tex]\[
\text{Interest} = 650 \times 0.04 = 26
\][/tex]
[tex]\[
\text{Interest} = 26 \times 2 = 52
\][/tex]
Thus, the interest earned in 2 years, if you put [tex]$650 in the account, is \(\$[/tex]52.00\).
