Question

Claris invested $140. She earned a simple interest of 3% per year on the initial investment. If no money was added or removed from the investment, what was the amount of interest Claris received at the end of two years? Show all work. Calculator allowed

Answer 1

$8.40

Explanation:

The formula for calculating simple interest is

principal * interest rate * time .

Plugging 140 into the principal, or starting value, 3% as the interest rate, and 2 (years) for the time, we get 140*0.03*2 = 8.4, or $8.40 as our answer. Note that 3% turned into 0.03 as turning a percentage into a decimal requires us to divide the decimal by 100