Question

Evelyn has $25,000 to invest in an account that offers a simple interest of 12%. How much interest will she have earned after 10 years?

Answer 1

$30,000

Explanation:

To solve this problem, lets use the simple interest formula:

`I = Prt`

P = principal amount

r = interest rate (decimal form)

t = time

First, change 12% into its decimal form:

12% ->
`(12)/(100)` -> 0.12

Next, plug in the values in the equation:

`I=25,000(0.12)(10)`

`I=30,000`

The interest earned after 10 years is $30,000