Question

You put $500 in a savings account. The account earns 3% annual simple interest per year. What is the interest earned after 4 years?

Answer 1

60$

Explanation:

The formula for simple interest is:

I = P x r x t

where I is the interest earned, P is the principal amount (initial investment), r is the annual interest rate, and t is the time in years.

In this case, P = $500, r = 3% = 0.03 (since the annual interest rate is expressed as a decimal), and t = 4 years. Plugging these values into the formula, we get:

I = $500 x 0.03 x 4

I = $60

Therefore, the interest earned after 4 years is $60.