Ciara deposits $100 into a savings account that earns 5% simple interest per year.

How much interest will Ciara earn in 1 year?

To calculate the simple interest earned in 1 year, we use the formula for simple interest:

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

Where:
- $ I $ is the interest earned.
- $ P $ is the principal amount (the initial deposit).
- $ r $ is the annual interest rate (in decimal form).
- $ t $ is the time the money is invested or borrowed for, in years.

In this case:
- $ P = 100 $ (the initial deposit).
- $ r = 0.05 $ (5% interest per year, converted to decimal).
- $ t = 1 $ year.

Now, calculating the interest:

\[
I = 100 \times 0.05 \times 1 = 5
\]

So, Ciara will earn **$5** in interest after 1 year.

Would you like further details or clarification? Here are 5 related questions for practice:

1. How much interest would Ciara earn in 3 years?
2. What would be the total amount in the account after 1 year, including interest?
3. If the interest rate increased to 6%, how much would Ciara earn in 1 year?
4. How much would Ciara earn in 2 years if she deposited $200 instead of $100?
5. What is the difference between simple interest and compound interest?

**Tip**: When working with simple interest, the interest amount remains the same each year because it is calculated only on the principal, not on the accumulated interest.

Ciara deposits $100 into a savings account that earns 5% simple interest per year. How much interest will Ciara earn in 1 year?

Learn how to calculate the simple interest Ciara earns on a $100 deposit at a 5% annual interest rate. This step-by-step guide shows how to apply the simple interest formula (I = P × r × t) to determine the interest earned after 1 year. Suitable for students in Grades 6-8.

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