Question

You deposit $1200 in a savings account that earns simple interest at a rate of 3% per year. How much interest will you have earned after 3years

Answer 1

To answer this question we will use the formula for simple interest:

`F=I(1+rt),`

where F is the final amount, I is the initial amount, r is the interest rate in decimal form, and t is the time in years.

Substituting r=0.03, I=1200, and t=3 in the above formula we get:

`F=1200(1+0.03*3)=1200(1.09)=1308.`

Therefore, after 3 years you will have a total of $1308, which means you have a gain of:

`1308-1200`

dollars.

Answer: $108.