Question

If spencer deposits $150 at a simple interest rate of 5%, how much interest will he have earned after 2 years?

A. $10.00

B. $15.00

C. $18.00

D. $22.50

Answer 1

B. $15.00

Explanation:

Assuming the interest rate is annually, we first have to calculate how much 5% is of $150:

150 * .05 = $7.50

So, at the rate of 5% (or $7.50) annually:

7.50 * 2 = 15.00

Spencer will have earned $15.00 on his investment after two years.