Question

How much interest is earned on a principal of $2.58 invested at an interest rate of 5% for four years?

Answer 1

$0.516≈ 0.52

Explanation:

For simple interest:

=PRT/100

=2.58 * 5 * 4/100

= 51.6/100

= $0.516 = $0.52 ( when rounded off)

Answer 2

Explanation:

The formula for simple interest is

prt = I, where p is the initial investment, r is the interest rate in decimal form, t is the time it's invested for, and I is the interest earned. We multiply the p, the r, and the t together to get I. For us that looks like this:

(2.58)(.05)(4) = I and

I = .516 or 52 cents.