Question

Finn started a savings account with $5,000 and earns 3% simple interest for 5 years. How much interest will be earned over the 5 years? a) 15,000 b)759 c)3000 d)5015

Answer 1

the answer is b. (since you accidentally typed 759 not 750)

Explanation:

The formula for simple interest is

A = P (1 + rt)

A = final amount

P = initial principal balance

r = annual interest rate

t = time (in years)

and the interest is going to be 750 after you plug it in, they are not asking for the amount of money total, but the amount of interest earned.

3 percent simple interest for 5 years means you are getting 0.03 percent of money from the 5,000 initial value and for 5 years. The total interest is $750.

I hope this helped! :)