1 Answer

Dan Obregon · Answer 1 · 2024-10-19T03:53:56+0000

Using the simple interest formula, on a principal of $1,000 with an annual interest rate of 5.5% for 2 years, the total interest earned is $110.

To calculate the amount of simple interest earned on a principal of $1,000 at an annual interest rate of 5.5% over 2 years, you can use the formula:

Interest = Principal × rate × time

First, convert the interest rate from a percentage to a decimal by dividing by 100:

5.5% = 5.5 ÷ 100 = 0.055

Then, use the simple interest formula to find the interest:

Interest = $1,000 × 0.055 × 2

Interest = $110

The total interest earned after 2 years is $110.

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