Question

Calculate simple interest earned on a deposit of $500 at a rate of 5% for 5 years. $125 $500 $625 $12,500

Answer 1

Interest = $125

Explanation:

A = P(1 + rt) , Where A is the amount, P is the principal, r is the rate and t is the time.

A = $500(1 + 5(
`(5)/(100)`))

A = $500 + $125 = $625

Interest (I) = A - P

I = $625 - $500 = $125

Answer 2

$125

Explanation:

Given:

deposit, P= $500

rate,i = 5%

time,t= 5 years

I=P*i*t

where P is principal amount

i is interest rate

t is time

I is simple interest

Putting values we get:

I=500*0.05*5

= 125 !