Calculating Interest Earned in 1 Year

Oct 13, 2025 by thesweetdesigns.com 64 views

Introduction

Desmond has a savings account with a balance of $\$900$ . The account earns an interest rate of $8\%$ per year, and the interest is not compounded. In this article, we will use the formula $i = prt$ to calculate the interest earned and determine the total amount in Desmond's savings account after 2 years.

Understanding the Formula

The formula $i = prt$ is used to calculate the interest earned on an investment. In this formula:

$i$ is the interest earned
$p$ is the principal amount (initial investment)
$r$ is the interest rate (in decimal form)
$t$ is the time period (in years)

Calculating Interest Earned in 1 Year

To calculate the interest earned in 1 year, we can use the formula $i = prt$ . In this case, the principal amount $p$ is $\$900$ , the interest rate $r$ is $8\%$ or $0.08$ in decimal form, and the time period $t$ is 1 year.

# Import necessary modules
import math
p = 900  # Principal amount
r = 0.08  # Interest rate
t = 1  # Time period
i = p * r * t
print(f"Interest earned in 1 year: $i.2f")

When we run this code, we get the interest earned in 1 year as $\$72.00$ .

Calculating Total Amount After 1 Year

To calculate the total amount in Desmond's savings account after 1 year, we add the interest earned to the principal amount.

# Calculate total amount after 1 year total_amount_1_year = p + i

print(f"Total amount after 1 year: $total_amount_1_year.2f")

When we run this code, we get the total amount after 1 year as $\$972.00$ .

Calculating Interest Earned in 2 Years

To calculate the interest earned in 2 years, we can use the formula $i = prt$ again. In this case, the principal amount $p$ is the total amount after 1 year ( $\$972.00$ ), the interest rate $r$ is still $8\%$ or $0.08$ in decimal form, and the time period $t$ is 1 year.

# Calculate interest earned in 2 years
i_2_years = (p + i) * r * 1
print(f"Interest earned in 2 years: $i_2_years.2f")

When we run this code, we get the interest earned in 2 years as $\$78.24$ .

Calculating Total Amount After 2 Years

To calculate the total amount in Desmond's savings account after 2 years, we add the interest earned in 2 years to the total amount after 1 year.

# Calculate total amount after 2 years
total_amount_2_years = (p + i) + i_2_years
print(f"Total amount after 2 years: $total_amount_2_years.2f")

When we run this code, we get the total amount after 2 years as $\$1050.24$ .

Conclusion

Introduction

In our previous article, we calculated the total amount in Desmond's savings account after 2 years using the formula $i = prt$ . In this article, we will answer some frequently asked questions related to Desmond's savings account.

Q: What is the interest rate used in the calculation?

A: The interest rate used in the calculation is $8\%$ per year.

Q: Is the interest compounded?

A: No, the interest is not compounded. This means that the interest earned in each year is added to the principal amount, and the interest rate is applied to the new principal amount in the next year.

Q: How much interest is earned in 1 year?

A: The interest earned in 1 year is $\$72.00$ .

Q: What is the total amount after 1 year?

A: The total amount after 1 year is $\$972.00$ .

Q: How much interest is earned in 2 years?

A: The interest earned in 2 years is $\$78.24$ .

Q: What is the total amount after 2 years?

A: The total amount after 2 years is $\$1050.24$ .

Q: Can I use this formula to calculate the interest earned on any investment?

A: Yes, you can use this formula to calculate the interest earned on any investment, as long as you know the principal amount, interest rate, and time period.

Q: What if the interest rate is not a decimal?

A: If the interest rate is not a decimal, you can convert it to a decimal by dividing it by 100. For example, if the interest rate is $8\%$ , you can convert it to a decimal by dividing it by 100, which gives you $0.08$ .

Q: What if the time period is not a whole number?

A: If the time period is not a whole number, you can still use the formula to calculate the interest earned. However, you will need to use a calculator or a computer program to perform the calculation, as it will involve decimal arithmetic.

Conclusion

In this article, we answered some frequently asked questions related to Desmond's savings account. We hope that this Q&A article has been helpful in clarifying any doubts you may have had about the calculation of interest earned on an investment.

Additional Resources

If you want to learn more about interest rates and investment calculations, we recommend checking out the following resources:

We hope that this article has been helpful in providing you with a better understanding of interest rates and investment calculations.