Question

Jose invested $5000 into a fund with an interest rate of 4.8%. How much interest would he earn after 2 years? A) $240 B) $24,000 C) $480  D) $48,000

Answer 1

Answer: C) $480

Explanation:

Given: Jose invested $5000 into a fund with an interest rate of 4.8%.

Therefore, Principal amount (P)$5000

Rate of interest = 4.8%

In decimal rate of interest(r)=0.048

Time (t)= 2 years

We know that the simple interest is given by

`S.I.=Prt\\\Rightarrow\ S.I.=5000*0.048*2\\\Rightarrow\ S.I.=\$480`

Hence, the interest after 2 years = $480