Question

What is the interest earned given the following:$5,500 at 7% for 1 year

Answer 1

Hello!

To solve this exercise about Simple Interest, we have to use the formula below:

`S.I.=P* R* T`

• P, = principal (5,500)

,

• R, = rate (7% = 0.07 for year)

,

• T, = time (1 year)

Let's replace the values in the formula:

`\begin{gathered} S.I.=P* R* T \\ SI=5,500\cdot0.07\cdot1 \\ S\mathrm{}I\mathrm{}=385 \end{gathered}`

So, the interest earned in 1 year is $385.