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Andrea deposited $300 in a savings account that pays 3% simple annual interest. How much interest will Andrea earn at the end of 3 years?

a. $27
b. $30
c. $60
d. $90

User R Poon
by
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1 Answer

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Final answer:

Andrea will earn $27 in simple interest on her $300 deposit at a rate of 3% over 3 years by using the formula I = PRT, where I is the interest, P is the principal amount, R is the rate, and T is the time in years.

Step-by-step explanation:

The question is about calculating the simple interest Andrea will earn on her $300 deposit in a savings account that pays a 3% annual rate over 3 years. Simple interest is found using the formula I = PRT, where I stands for interest, P stands for principal amount (initial amount), R stands for rate of interest, and T stands for time in years.

In Andrea's case:

  • Principal (P) = $300
  • Rate (R) = 3% or 0.03 (as a decimal)
  • Time (T) = 3 years

Now, plugging these values into the formula, we get:

I = $300 × 0.03 × 3

Calculating the product:

I = $27

Therefore, Andrea will earn $27 in interest at the end of 3 years.

User Jamie Thomas
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