Question

"If you start with a principal amount of $300 and the simple interest rate is 7%. What will the interest amount be after five years?"

Answer 1

The interest amount on a principal of $300 at a simple interest rate of 7% over five years is $105. This is calculated using the simple interest formula by multiplying the principal by the interest rate and then by the time period.

Step-by-step explanation:

If you start with a principal amount of $300 and the simple interest rate is 7%, you can calculate the interest amount after five years using the formula for simple interest, which is:

Interest = Principal × rate × time

To calculate the interest amount:

1. 
   
3. Convert the interest rate from a percentage to a decimal by dividing by 100: 7% / 100 = 0.07
4. 
   
6. Multiply the principal by the interest rate: $300 × 0.07 = $21
7. 
   
9. Multiply this result by the time (in years): $21 × 5 years = $105

Therefore, the interest amount you will earn after five years is $105.