Question

If the principal is 200 and the interest rate is 4 percent, what is the simple interest earned in one year?

1) 8
2) 50
3) 800

Answer 1

The simple interest earned in one year on a principal of $200 at an interest rate of 4% is $8. This is calculated using the formula Interest = Principal × rate × time.

Step-by-step explanation:

When it comes to calculating the simple interest earned in one year, you would use the formula Interest = Principal × rate × time. For a principal amount of $200 with an interest rate of 4%, and the time period being one year, the calculation would look like this:

$200 × 0.04 × 1 = $8.

Therefore, the simple interest earned in one year on a principal of $200 at a rate of 4% is $8. This aligns with option (1) from the choices you've provided.