Answer: $320
Step-by-step explanation:
A principal of $4,000 was invested.
The principal increases at a rate of 8% every year by simple interest.
After 1 year the total in the account can be calculated by the formula:
= Principal * ( 1 + rate * time)
= 4,000 * ( 1 + 8% * 1)
= $4,320
Interest:
= Amount after a year - original price
= 4,320 - 4,000
= $320
