Question

ernesto has $90,000 in a savings account that earns 1% interest per year. the interest is not compounded. how much interest will he earn in 1 year? use the formula ( i = prt ), where ( i ) is the interest earned, ( p ) is the principal (starting amount), ( r ) is the interest rate expressed as a decimal, and ( t ) is the time in years.

Explanation:

Step1: Identify values of p, r, t

Principal \( p = 90000 \), rate \( r = 1\% = 0.01 \), time \( t = 1 \) year.

Step2: Apply simple interest formula

Using \( i = prt \), substitute values: \( i = 90000 \times 0.01 \times 1 \)

Step3: Calculate the interest

\( 90000 \times 0.01 = 900 \), then \( 900 \times 1 = 900 \)

Answer:

900