Final answer:
The interest earned on a $760 investment at a 3 percent interest rate over 5 years would be $114 calculated using the simple interest formula I = Prt. In Maths, Compound interest can be calculated in different ways for different situations. We can use the interest formula of compound interest to ease the calculations. To calculate compound interest, we need to know the amount and principal. It is the difference between amount and principal.
Step-by-step explanation:
If you invest $760 in a savings account at a 3 percent interest rate for 5 years, the amount of interest you will earn can be calculated using the formula for simple interest, which is I = Prt, where I is the interest, P is the principal amount (initial investment), r is the annual interest rate (in decimal form), and t is the time in years.
In this case, the principal P is $760, the rate r is 0.03 (since 3 percent is equal to 0.03 when expressed as a decimal), and the time t is 5 years. Plugging these values into the formula gives us:
I = $760 × 0.03 × 5 = $114
Therefore, the interest earned over 5 years would be $114.
Compound interest is the interest imposed on a loan or deposit amount. It is the most commonly used concept in our daily existence. The compound interest for an amount depends on both Principal and interest gained over periods. This is the main difference between compound and simple interest.