Question

Martha invested a principal amount of $15,000 into a savings account that earns simple interest at a rate of 4.5% per year. How much money will she earn in interest over 6 years?

A.

$4,050

B.

$1,500

C.

$3,845

D.
4,500

Answer 1

Option A

The simple interest earned over 6 years is $ 4050

Solution:

Martha invested a principal amount of $15,000 into a savings account that earns simple interest at a rate of 4.5% per year

The formula for simple interest is given as:

`Simple\ Interest = (p * n * r)/(100)`

Where, "p" is the principal and "n" is the number of years and "r" is the rate of interest

From given,

p = 15000

r = 4.5 %

n = 6 years

Substituting the values we get,

`Simple\ Interest = (15000 * 4.5 * 6)/(100)\\\\Simple\ Interest = 150 * 4.5 * 6\\\\Simple\ Interest = 4050`

Thus simple interest earned over 6 years is $ 4050