To calculate the interest earned on an investment over a certain period of time with a fixed interest rate, we can use the formula for simple interest, which is:
\(\[ \text{Simple Interest} = P \times r \times t \]\)
where:
- \(\( P \)\) is the principal amount (the initial amount of money),
- \(\( r \)\) is the annual interest rate (expressed as a decimal), and
- \(\( t \)\) is the time the money is invested for, in years.
Given the problem, we have:
- Principal \(\( P = \$571 \)\)
- Annual interest rate \(\( r = 5\% \)\) (To convert a percentage to a decimal, we divide by 100, so \(\( r = \frac{5}{100} = 0.05 \)\))
- Time \(\( t = 4 \)\) years
Plugging these values into the formula, we get:
\(\[ \text{Simple Interest} = \$571 \times 0.05 \times 4 \]\)
Now, perform the multiplication:
\(\[ \text{Simple Interest} = \$571 \times 0.2 \]\)
\(\[ \text{Simple Interest} = \$114.2 \]\)
Therefore, a \($571 investment will earn $\)114.2 in interest at a 5% annual rate over four years.
