Question

Shelia deposited $800 into an account that earned 3% simple interest. She did not make any other deposits or withdrawals. After 5 years how much interest did Sheila earn?

Answer 1

Answer: After 5 years, Sheila earns $120

Step-by-step explanation: The calculation of simple interest is given as

Interest = P x R x T

Where P = the amount invested initially (800), R = the rate of interest earned (3% or 0.03) and T = the number of years (5) investment was held

The interest she earned can now be calculated by substituting for the known values as follows;

Interest = 800 x 0.03 x 5

Interest = 120

Therefore after 5 years, Sheila earns $120

Answer 2

Sheila earned $120 in interest.

Explanation:

In order to calculate the interest earned by Sheila we can use the simple interest formula shown bellow:

i = P*r*t

Where i is the interested earned, P is the amount invested, r is the interest rate and t is the total time. For this case we have:

i = 800*0.03*5

i = 24*5

i = 120

Sheila earned $120 in interest.