Question

How much interest will you earn by investing $1200 at a simple interest rate of 2.5% per year for 6 years?

Answer 1

`\bf ~~~~~~ \textit{Simple Interest Earned Amount}\\\\A=P(1+rt)\qquad\begin{cases}A=\textit{accumulated amount}\\P=\textit{original amount deposited}\dotfill & \$1200\\r=rate\to 2.5\%\to (2.5)/(100)\dotfill &0.025\\t=years\dotfill &6\end{cases}\\\\\\A=1200[1+(0.025)(6)]\implies A=1200(1.15)\implies A=1380`

Answer 2

$30

simple interest = (PRT)/100

where P is the principal ( amount being invested) → $1200

R is the rate of interest → 2.5%

T is time in years → 6

interest = (1200 × 2.5 × 6)/100 = $30