Question

Anna invests $875 into an account and receives 4% simple interest for 24 months. How much simple interest will she earn??

Answer 1

£70

Explanation:

simple interest (I) is calculated as

I =
`(PRT)/(100)`

where P is principal, R is rate of interest and T is time in years.

Note that 24 months = 2 years, thus

I =
`(875(4)(2))/(100)` =
`(7000)/(100)` = £70

Answer 2

$70

Explanation:

1. I = PRT

2. Sub in what you know into the equation:

I = $875 (principal amount) x 0.04 (4%) x 2 (24 months = 2 years)

3. 875 x 0.04 x 2 = 70

4. Anna will receive $70 in simple interest