Question

How do you do this problem: Find the simple interest when $6,000 is deposited at an interest rate of 3% for 4 years.

Answer 1

The simple interest is $720.

Explanation:

This is a simple interest problem.

The simple interest formula is given by:

`E = P*I*t`

In which E are the earnings, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

In this problem, we have that:

`P = 6000, r = 0.03, t = 4`

So

`E = P*I*t = 6000*0.03*4 = 720`

The simple interest is $720.