Question

Sam wants to invest $6000 in a savings account for 5 years.

Account A pays simple interest at a rate of 6% per year.

Work out the amount of profit he will make with this account.

Answer 1

To calculate the profit on the investment, we can use the formula for simple interest:

I = P * r * t

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

In this case, we have:

P = $6000 (the initial investment)
r = 0.06 (6% annual interest rate)
t = 5 years (the time period)

Plugging in the values, we get:

I = $6000 * 0.06 * 5 = $1800

Therefore, the amount of profit Sam will make with Account A, which pays simple interest at a rate of 6% per year, is $1800.