Final answer:
The simple interest earned on a $450 deposit at a 7% interest rate over 6 years is calculated using the formula: Simple Interest = Principal × Rate × Time, which amounts to $189.00.
Step-by-step explanation:
Finding Simple Interest
To find the simple interest earned after 6 years on a $450 deposit at an interest rate of 7%, we apply the simple interest formula:
Simple Interest = Principal × Rate × Time
Where the Principal is $450, the Rate is 0.07 (7% expressed as a decimal), and Time is 6 years.
Using the formula, we find that:
Simple Interest = $450 × 0.07 × 6
Simple Interest = $189.00
The total simple interest earned after 6 years is $189.00.
Practicing the Simple Interest Formula
To become more familiar with the simple interest calculation, let's practice with a differing scenario:
- If you deposit $100 at a simple interest rate of 5% held for one year, the interest earned would be $5.
- The total future amount with simple interest for a $100 deposit at 5% held for three years would be $15.
Remember, the total future amount with simple interest is the original principal plus the interest earned. These examples can help you get comfortable using the simple interest formula for various time frames and interest rates.