Question

4) A bank is offering 3.5% simple interest on a savings account. If you deposit

$12,000, how much interest will you earn in two years? *
A $420
B $840
C $4,200
O D $8,400

Answer 1

B. $840

Explanation:

Given that

Rate of simple interest = 3.5%

Principal amount = $12,000

Time = 2 year

To find:

Interest earned = ?

Solution:

Formula for Simple Interest is given as:

`S.I. = (PRT)/(100)`

Where P is the principal amount

R is the annual Rate of interest

T is the time for which principal was invested.

Here, we are given that:

P = $12,000

R = 3.5%

T = 2 years

Putting all the values in the formula:

`SI= (12000* 3.5 * 2)/(100)\\\Rightarrow SI= 12* 35 * 2\\\Rightarrow SI = \$840`

So, answer is:

B. $840