An amount of $4000 is invested. The interest rate is 2%. What is the amount earned in one year?

Interest = PRT/100

Compound interest = P (1 + (R/100)) ^T

Where P = Principle (amount)

R = Rate

T = Time

Since the time is only 1 year, the answer will be the same for both interest and compound interest formulae.

∴ 4000 (2) (1) / 100 = $80 (This is the interest value)

Note if question ask you what is the total amount after x years, be sure to add the interest with the principle.