Question

What's the annual interest for a principle of $3500 at a simple annual interest rate of 2.3% over the course of 5 years

Answer 1

Annual interest is, $80.50

Explanation:

Simple interest defined as it is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments i.e,

`I = (P * R * T)/(100)` where

I represents the simple interest

P represents the principal

R represents the rate

T represents the time in year.

Given: P = $3500 , R = 2.3% and T = 5 years.

Using simple interest formula to calculate Interest;

`I = (3500 * 2.3 * 5)/(100) =(3500 * 11.5)/(100)`

Simplify:

`I = \$402.50`

Therefore, Annual interest =
`(402.50)/(5) = \$80.50`