Question

Suppose Cho deposits $200 into a bank account for 3 years. The annual interest rate is 5%. Find the simple interest earned.

A.
$30


B.
$100


C.
$10


D.
$300

Answer 1

A.

$30

Explanation:

Cho’s account earned $30 in annual interest.

Answer 2

Simple interest is given by the formula:
S.I=PRT/100
where:
P=principle
R=rate
T=time
From the information given:
P=$200, r=5%, t=3 years.
Plugging into the formula we obtain:
A=200×5/100×3
simplifying we obtain:
A=$30

Answer is: A] $30