Question

Calculate simple interest earned on a deposit of $500 at a rate of 5% for 5 years.

Answer 1

A = $625.00

(I = A - P = $125.00)

Equation:

A = P(1 + rt)

Explanation:

Answer 2

Answer: $125

Step-by-step explanation: The formula for simply interest = P x R x T where P equals the principle, R equals the rate in decimal format and T equals time in the number of years.

Your formula for this problem is: $500 x .05 x 5 = $125. Therefore, you would earn $125 in interest over five years.