Question

Rachel deposits $200 into an account that pays simple interest at a rate of 2% per year. How much interest will she be paid in the first 3 years?

Answer 1

The simple interest on a $200 deposit at a 2% annual rate over 3 years is $12, calculated using the simple interest formula.

Step-by-step explanation:

The question involves calculating the simple interest that Rachel will be paid on a $200 deposit at a rate of 2% per year over the course of 3 years. To calculate the interest, we use the simple interest formula:

Interest = Principal × Rate × Time.

In this case, the principal is $200, the rate is 2% or 0.02 when expressed as a decimal, and the time is 3 years.

Using the formula, we get:

Interest = $200 × 0.02 × 3 = $12

Therefore, the total interest Rachel will be paid in the first 3 years is $12.