Danielle has in a savings account. The interest rate is per year and is not
compounded. How much will she have in total in 1 year?
Use the formula , where is the interest earned, is the principal (starting amount),
is the interest rate expressed as a decimal, and is the time in years.

To find out how much total money Danielle will have in one year, we first calculate the interest earned using the formula . Here, , (which is as a decimal), and . So, . This means she earns in interest. Adding this to her initial amount, . Therefore, Danielle will have a total of in her savings account after one year.

In the world of finance, understanding simple interest is key for budgeting and saving. Many people still rely on savings accounts for future expenses or emergencies, so knowing how interest works can help you maximize your earnings. Playing around with different principal amounts or interest rates using this formula can give you insights into how to better manage your savings.

When calculating simple interest, a common oversight is not converting percentages into decimals accurately. Missing that little detail could lead to a significant error in your final calculation. Additionally, remember that simple interest does not take compounding into account—money would grow faster in a compound interest account! Always double-check your calculations to ensure accuracy when you’re planning your finances.