Question

Katrina deposited $500 into a savings account that pays 4% simple interest. How much interest will she earn in 3 years if she makes no additional deposits? Round your answer to the nearest cent.

Answer 1

$560.00

Simple Interest Formula: A= P(1+rt)

A= final amount

P = initial principal balance

r = annual interest rate

t = time (in years)

Answer 2

Answer: the amount of interest after 3 years is $60

Explanation:

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest paid on the amount of money deposited.

P represents the principal or amount of money deposited.

R represents interest rate on the deposit.

T represents the duration of the deposit in years.

From the information given,

P = $500

R = 4%

T = 3 years

Therefore,

I = (500 × 4 × 3)/100

I = $60