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

How much interest will Ciara earn in 1 year?
A.$1
B.$5
C.$10
D.$50

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 in years.

Given:
- $ P = 100 $,
- $ r = 5\% = 0.05 $,
- $ t = 1 $ year.

Substituting the values into the formula:

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

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

The correct answer is:
**B. $5**

Would you like further explanation or have any questions? Here are 5 related questions to deepen your understanding:

1. How much total money will Ciara have after 1 year, including interest?
2. What if the interest rate were 6% instead of 5%? How much interest would Ciara earn in 1 year?
3. How does compound interest differ from simple interest?
4. How much interest would Ciara earn over 2 years with the same 5% simple interest rate?
5. If Ciara deposited $200 instead of $100, how much interest would she earn in 1 year?

**Tip:** Simple interest grows at a steady rate, whereas compound interest grows exponentially over time due to the interest earning on previously earned interest.

Ciara deposits $100 into a savings account that earns 5% simple interest per year. How much interest will Ciara earn in 1 year? A.$1 B.$5 C.$10 D.$50

Learn how to calculate the simple interest on Ciara's $100 deposit at a 5% annual interest rate. This step-by-step solution demonstrates the use of the simple interest formula (I = P × r × t) to find that Ciara earns $5 after 1 year. Perfect for Grades 6-8 students.

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