Maria deposits $400 into an account that pays simple interest at a rate of 4% per year. How much interest will she be paid in the first 2 years?

1. Break Down the Problem

To find the simple interest earned over a period, we can use the formula for simple interest: $I = P \times r \times t$ where:

• $I$ is the interest earned,
• $P$ is the principal amount (initial deposit),
• $r$ is the annual interest rate (as a decimal),
• $t$ is the time in years.

2. Relevant Concepts

In this case:

• $P = 400$ (the initial deposit),
• $r = 0.04$ (4% as a decimal),
• $t = 2$ years (the time period).

3. Analysis and Detail

Now, substituting the values into the formula: $I = 400 \times 0.04 \times 2$ Calculating step by step:

1. Calculate $400 \times 0.04 = 16$.
2. Now, multiply by the time period: $16 \times 2 = 32$.

4. Verify and Summarize

So, Maria will earn $32 in interest over the first 2 years.

Final Answer

The interest paid to Maria in the first 2 years will be $32.